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Ethernet services

AboveNet Puts Out 40-Gig Feelers

DALLAS -- Optical Expo 2008 -- AboveNet Inc. (NYSE: ABVT)'s CTO says the carrier hopes to be the first in the world to commercially offer 40-Gbit/s transport links in a metro network to enterprise customers.

Rajiv Datta, senior VP and CTO of AboveNet, told Light Reading here Monday that he hopes AboveNet and its equipment vendor partners can get the price for such a service down to 2.5- to 3-times the cost of a 10-Gbit/s optical metro transport service.

Datta admits he's not sure if there's a market big enough to support that kind of super-high-bandwidth service yet, but he suspects the market may exist given the number of big companies that have eagerly bought AboveNet's metro 10-Gbit/s service. "It has been off the charts. Very significant," Datta says.

He also notes that his enterprise customers want private networks which are future-proof.

In his keynote here, Datta said AboveNet has a footprint of 1.8 million fiber miles in 15 major markets, with 1,400 buildings connected. Its network, through partners, extends to another 1,600 buildings. The company offers large companies and carriers Layers 1,2, and 3 connectivity on its 10-Gbit/s-optimized network. The service provider's dedicated 10-Gbit/s point-to-point Ethernet service, announced in May, is one of the finalists in Light Reading's Leading Lights Awards. (See LR Names 2008 Leading Lights Finalists .)

Regarding his goal of a 40-Gbit/s metro transport service, Datta says the cost of 40-Gig systems has made this "a concern." He's hoping vendors will agree, along with AboveNet, to take a margin hit to plow this new ground for a service that, should it catch on, could be profitable later.

Datta says AboveNet customers, especially financial firms, obsess over fast networks with no latency or delays. "When the market drops 700 points in a day, and most of that drop occurs in an hour, microseconds can make the difference between making and losing a lot of money," Datta said in his keynote, referring to Monday's stock market action.

The enterprise perspective on optical networks is helpful to vendors here, several of whom are seeking customers outside the big telcos. A panel this morning -– featuring AboveNet's Datta and panelists from Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), Alcatel-Lucent (NYSE: ALU), and XKL LLC -- will address optical networking for the enterprise, including the increasing use of ROADMs in enterprise networks.

AboveNet has been quiet lately, mired by years of financial restatements that came on the back of an SEC investigation that ended a while ago. AboveNet, founded as National Fiber Network in the early 1990s, gained fame as Metromedia Fiber Network and traded on the Nasdaq under the symbol MFNX. The company filed for bankruptcy protection in May 2002, saying it had overbuilt its network. It reorganized and emerged from bankruptcy in 2003, at which point MFN shareholders were wiped out.

Now the carrier is working towards filing its financial results for recent years, while its shares trade on the pink sheets.

"This is one of those questions that requires alcohol," joked Datta on Monday afternoon when asked by an audience member about his company's revenues. "We just announced the 2007 numbers and, quite honestly, I don't even remember them anymore," he says.

For those still wondering, AboveNet just reported 2007 revenues of $253.6 million and a net income of $13.8 million.

— Phil Harvey, Editor, Light Reading
materialgirl 12/5/2012 | 3:30:05 PM
re: AboveNet Puts Out 40-Gig Feelers If AboveNet needs wall street trades to justify their network, they may be in for a world of hurt. While investment banks think in ns, commercial banks, who now own them, think "overnight batch".

However, the growing use of SaaS applications, and increasingly storage, may be positive over time.

Finally, if the metro access is 40-G, what does the backbone look like?
tmmarvel 12/5/2012 | 3:30:03 PM
re: AboveNet Puts Out 40-Gig Feelers So how much does metro 40G (point to point) service cost relative to 10Gb/s? Any one actually already paying for or shopping for such service?

Traditionally in telecom, 4-times equipment port capacity increase roughly doubles the price, making upgrades economical when customer applications actually demanded more capacity. Does/not the existing metro fiber or amplifiers support 40Gb/s?

With WDM, point-to-point 40G customer services can be handled via WDM over Nx40G lambda backbones, so there wouldnGÇÖt yet be need for higher backbone transmission rates per wavelength than 40G. The need for higher backbone carrier signal rates emerges when there is demand for multi-point connectivity over sub-lambda muxed/shared carrier signals, and the logical next rate of course would be 160G for simple multiplexing, as packet switched 40G+ (100/160G) interfaces will hardly be feasible or economical for quite some time.
DCITDave 12/5/2012 | 3:30:00 PM
re: AboveNet Puts Out 40-Gig Feelers Maybe they're just running point to point links and still using their 10-Gbit/s backbone?

I dunno. We're still talking of a service that hasn't been built yet, so I'll have a better answer once they decide on a supplier.

ph
materialgirl 12/5/2012 | 3:29:59 PM
re: AboveNet Puts Out 40-Gig Feelers Thank you Lights Out. So, the 40Gbps streams never leave the metro.

As optical equipment vendors increasingly try to bypass crippled Tier 1 carriers by going either to Abovenet or to enterprises directly, the question of management sophistication looms. Have the years of hard work these vendors have put into developing more nimble optical networks made a difference in who can actually use this stuff? Are we in the process of disintermediating the Tier 1s?
DCITDave 12/5/2012 | 3:29:59 PM
re: AboveNet Puts Out 40-Gig Feelers I doubt any financial firm is going to skimp on bandwidth in their trading network just so they can "overnight batch" results to their ibank owners.


DCITDave 12/5/2012 | 3:29:59 PM
re: AboveNet Puts Out 40-Gig Feelers re: "So how much does metro 40G (point to point) service cost relative to 10Gb/s?"

They're saying they want it to cost 3x, so I imagine in real life it probably costs a bit more. Maybe 5x? Just a guess.
paolo.franzoi 12/5/2012 | 3:29:58 PM
re: AboveNet Puts Out 40-Gig Feelers
Phil,

The batching overnight is for things like check images. That is highly different than active trading.

Bank branch networks are very different in terms of usage between daytime and nighttime. Same thing can be said of insurance offices.

seven
reese_lightening 12/5/2012 | 3:29:51 PM
re: AboveNet Puts Out 40-Gig Feelers Hold on, what we've been hearing is for a 40G upgrade, it has to be 2.5x to 3x 4x10G... such that there's a cost reduction for the same bandwidth. Currently this is not the case, the factor is probably around 5x.

Now AboveNet wants 40G to be 2.5x 1x10G? Is it a typo? If I can do the math correctly, they want the cost of 40G to come down from 20x to 2.5x.

"He's hoping vendors will agree, along with AboveNet, to take a margin hit", are they thinking margins are at the 800% range at the moment?
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