Forums Forge Alliance
The combined organization, which will be known as the MPLS and Frame Relay Alliance (what else?), will bring together telecommunications service providers, equipment vendors, and software and silicon suppliers from both organizations. The merger is expected to be completed by March 31.
Leaders in both organizations are calling it a perfect technological marriage. Andrew Malis, president and chairman of the MPLS Forum and CTO of Vivace Networks, says there are financial benefits to merging the groups, but he adds that without the close technological ties it wouldn’t make sense. Malis, who was involved in the early work of the Frame Relay Forum in the 1990s, says that Multiprotocol Label Switching (MPLS) developers have borrowed a lot of their concepts from Frame Relay. But he says that enough differences remain to make the technologies complementary rather than competitive.
“From its start MPLS has been about the core,” says Malis. “Frame Relay has traditionally been an access and edge technology. It has used ATM as the transport technology in the core, but that’s changing.”
Carriers have consistently generated a large portion of their revenue from Frame Relay access services. This isn’t expected to change anytime soon. But what is changing is the transport technology used in the core of the network. Carriers are steadily migrating their Asynchronous Transfer Mode (ATM) core networks to MPLS in an effort to provide flexible services at a lower cost point. As a result, MPLS has gained quite a bit of momentum over the past year among carriers. Large incumbents like BellSouth Corp. (NYSE: BLS), SBC Communications Inc. (NYSE: SBC), and Verizon Communications Inc. (NYSE: VZ) have all announced deployments or planned deployments of MPLS in their new IP buildouts. AT&T Corp. (NYSE: T) is already offering Frame Relay service over an MPLS core.
Analysts say the merger is a boon for Frame Relay, which has not grown much in comparison to MPLS over the last few years.
“This shows that the future of Frame Relay is with MPLS,” says Kevin Mitchell, an analyst with Infonetics Research Inc. “The merger of the two groups should help with the technology and standards development to make Frame Relay transported over MPLS absolutely transparent to service providers and businesses.”
But technology alone isn’t what’s driving this merger. Money also plays a key factor. Running an industry forum is not cheap. Organizing technical meetings, developing marketing material, hosting Websites, and participating in industry tradeshows costs big bucks, admits Malis.
Roger Ruby, president of the Frame Relay Forum, agrees. Even though the Forum added a few new members last year, Ruby concedes that membership overall is down about 50 percent from the FRF’s peak in the 1990s.
Currently, the Frame Relay Forum has 23 members and the MPLS Forum has 53 members. There are only five companies that have membership in both -- Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Bell Canada (NYSE/Toronto: BCE), Equant (NYSE: ENT; Paris: EQU), LM Ericsson (Nasdaq: ERICY), and Lucent Technologies Inc. (NYSE: LU).
When the industry was flush with venture-rich startups, industry forums flourished. But times have changed. As startups disappear and larger companies tighten marketing budgets, the MPLS Forum and other industry groups are getting creative about how they go about their work. For example, the MPLS Forum has already announced an alliance with the Metro Ethernet Forum in order to market and promote both technologies (see Forums Double-Team to Push Specs). It also has been working with the ATM Forum and the Broadband Content Delivery Forum (BCD) to co-host events.
Malis and Ruby say there is a chance the new MPLS and Frame Relay Alliance could merge with another industry forum before the end of the year. Some members of the group have suggested merging with the ATM Forum. But Malis says this might be complicated, given that ATM and MPLS are often viewed as competing technologies (see MPLS vs ATM? Vendors Weigh In).
“One of the big challenges is how to market both technologies without taking away from the mission and focus of either one,” says Malis. “There has to be a good rationale behind merging the two for it to work.”
— Marguerite Reardon, Senior Editor, Light Reading