Voodoo Econ in Metro DWDM
Five years ago, every pitch I saw on metro DWDM dealt with the delivery of wavelength and Gigabit Ethernet services. Over the last two years, however, the pitch has shifted to cost savings. Funny how the marketing pitch shifts once the penny pinching begins.
I have lost count of the number of business cases I have seen touting the tremendous savings of DWDM over Sonet ADMs. With the tremendous push to cut costs in carrier networks, one would think there would have already been a mass migration to DWDM. So why, other than specific cases of point-to-point fiber relief, is Metro DWDM failing to make the grade?
Well, it turns out that business-case theory is one thing and practical reality is another. There are two areas where these scenarios diverge: The first lies in the difference between the first cost of equipment versus long-term cost, and the second concerns the operational impact that comes from the inflexibility of metro DWDM versus Sonet.
“The vendors usually show a business case that compares fully or substantially loaded systems,” says Sam Greenholtz of Telecom Pragmatics Inc. Greenholtz, now a telecommunications consultant, was involved in the initial rollout of DWDM systems used for fiber relief at Verizon Communications Inc. (NYSE: VZ). “The savings may not come until years down the road. The RBOCs are just as concerned with first cost, especially in these economic times. The vast majority of DWDM deployments by RBOCs are for niche applications for fiber relief.”
The second issue is the inflexibility of DWDM rings when compared with Sonet. Most DWDM optical add/drop multiplexer (OADM) systems add and drop wavelengths in fixed bands (or groups), typically four at a time. Banding not only contributes to the high initial cost, but also requires complex planning to make sure that wavelengths are used efficiently. In addition, most DWDM systems provide little if any management data on wavelengths that are not dropped (i.e., that are passed through) as compared to that typical of Sonet systems. This can make it hard to trace problems with individual channels.
This inflexibility is particularly unforgiving of an error in traffic forecasts. “When a forecast is missed for a wavelength, an overlay network is needed to serve the change in forecasted demand,” says Scott Mountford, Corporate Manager of Fundamental Network Planning at SBC Communications Inc. (NYSE: SBC). “The overlay network can cost in the millions of dollars.” These factors are never considered in the theoretical DWDM business case presented by most vendors.
In short, the theoretical business case has been based on quite a bit of smoke and mirrors. That’s the bad news. The good news? The vendors are listening and are beginning to develop systems based on Reconfigurable OADM technology. These systems allow wavelengths to be added and dropped individually on a dynamic basis rather than in fixed groups. This dramatically cuts both the capital and operational costs. “ROADM allows the flexibility of Sonet-like management of wavelengths,” says SBC’s Mountford.
Basic ROADMs are only a part of the answer, however. ROADM component technology has been around for a while, but ROADMs introduce an even stronger need for management data on individual wavelengths. ROADM rings are very sensitive to topology changes and require close monitoring and control of wavelength power to keep the system in balance. In addition, some sub-rate multiplexing is needed to efficiently utilize wavelengths and so strengthen the business case. These issues are being addressed, however, and the business case can be compelling. Mountford says that ROADM technology combined with integrated Sonet multiplexing for optical input easily beats Sonet for metro-to-metro interconnects, and his modeling shows that it also proves in for three to six node rings within the metro.
Several RFPs for ROADM-based solutions are expected within the next three to six months, and most major vendors have begun the development of non-banded ROADM-based systems. Startups Tropic Networks Inc. and Photuris Inc. are focused on next-generation ROADM-based systems and appear to have a substantial jump on the larger vendors.
Will this result in any business, or are these just more lab experiments and RFP exercises? If some of the service provider models are correct, ROADM-based systems not only move the business case from negative to positive, but also may save hundreds of millions of dollars over the next few years. These kinds of numbers are generating a lot of interest at the executive level, not just in the labs.
This time, the business case numbers generated by the vendors and the RBOCs just might match. It should be interesting to watch.
— Doug Green is founder and principal of the Bradam Group LLC, a telecom consultancy in northern Virginia. He can be reached at: [email protected].
Many of the issues discussed above are covered in greater depth in the inaugural report from Light Reading's independent market research division, Heavy Reading: Multiservice Provisioning Platforms: Empowering the Metro Edge.