Nortel Beefs Up Ethernet Attack
ATLANTA -- OFC 2003 -- Nortel Networks Corp. (NYSE/Toronto: NT) followed up on its long-running Ethernet story with a barrage of product upgrade announcements here today at the OFC Conference, pertaining to a series of VPN and Ethernet private-line capabilities for its OPTera Metro 5000, 4000, and 3000 switches.
The product enhancements include a Gigabit Ethernet private-line line card for OPTera Metro producs, a 10/1000 Ethernet private-line module for the OPTera Metro 3000, and VPN (virtual private network) capabilites for all of the switches. The line cards employ emerging VPLS (virtual private LAN service) and GFP (Generic Framing Procedure) technology that will allow service providers to roll out Ethernet-based VLAN (virtual LAN) services and VPNs to enterprise customers.
On the transport side, Nortel is using GFP and Resilient Packet Ring technology to carry more Ethernet services and storage protocols over Sonet/SDH infrastructure using the OPTera platform. (For more on this technological trend, see today's Light Reading report: Making Sonet Ethernet-Friendly.) The Ethernet announcements coincided with other announcements Nortel made today about running more storage interfaces over Sonet/SDH infrastructure (see Nortel Pipes SANs Into Sonet).
In a general marketing sense, Nortel appears to be pushing hard for service providers to start rolling out data services such as VPNs and VLANs based on GFP and VPLS.
"The innovation always starts with the enterprise," says Marco Pagani, president of Nortel's Optical Ethernet division. "We're looking to extend the LAN into the metro network and the WAN and Ethernet is the way to do that."
Will service providers bite? Right now, it's too early to tell. VPLS and VLAN services are still in their infancy, and service providers may be too busy struggling for life to be in the mood to experiment with cutting-edge data services.
"VLANs as a service are still a niche," says David Gross, a senior analyst with Communications Industry Researchers Inc. (CIR). "What Nortel is trying to do is use Ethernet to knock out routers, getting enterprises to build VPNs at Layer 2."
The point about eliminating routers is important, as a bevy of competing technologies for VPN creation are emerging. Service providers now appear to have many options, and it's not clear which will prevail. For example, service providers have their pick of using edge routers and MPLS-based VPNs, or they could opt for Layer 2 solutions such as Ethernet and VPLS added through switches.
Another question about Ethernet services is whether service providers will be interested in cannibalizing existing Frame Relay and ATM data services -- which are among the most successful data services offered -- in order to make the leap to Ethernet.
Nortel's Pagani says that convincing service providers to move to Ethernet is a challenge, but there is sufficient motivation. "Cannibalization is the biggest barrier to overcome," he said. "But if you can offer today's services at a higher profit margin, why wouldn't you cannibalize?"
— R. Scott Raynovich, US Editor, Light Reading
For up-to-date information about the OFC Conference, please visit Light Reading’s Unauthorized OFC Preview Site.