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Gigabit Ethernet: Hope vs. Hype

Use of gigabit Ethernet in service provider networks could grow eightfold by 2005 -- with nearly 30 percent of revenues coming from 10-Gbit/s links. But Ethernet must become "carrier ready" to reach its full potential.

So says a recent report from Pioneer Consulting (see Report Sees Gig-E Growth). The firm says use of 1- and 10-Gbit/s Ethernet in access, metropolitan, and wide-area core networks will drive sales to carriers seeking lower-cost technologies to expand their facilities and offer new data-intensive services.



Industry sources bristle at Pioneer's projections, which estimate a gigabit Ethernet market of $44 billion by 2005. Even the most enthusiastic vendors in this market consider that figure excessive.

"The potential for metro optical Ethernet is large, but... I don't know what methodology they may have used," says Nan Chen, director of product marketing at Atrica Inc. and president of the Metro Ethernet Forum (MEF), an industry group.

Chen says it's not unrealistic to assume that the market for gigabit Ethernet in metro networks would double annually, reaching about $5 billion by 2005. But he says that estimate is contingent on vendors proving that Ethernet can perform reliably in carrier networks.

Pioneer Consulting's report concedes that carrier-class reliability and quality of service are still missing from the packet-driven, "best effort" world of Ethernet. And these features must be proven to service providers before the market can reach its full potential, the firm says.

Industry forces are trying to make this happen. At a meeting of the MEF last week, for instance, over 90 attendees from about 50 different companies reportedly agreed on a common method of matching Sonet's link recovery using MPLS (multiprotocol label switching) in Ethernet WANs.

"This was a breakthrough," says Chen. "We've developed a 50-millisecond protection model, when most people think Ethernet recovery takes 30 seconds."

Chen says the establishment of a protection scheme will be key to providing the value proposition carriers will require in order for the metro Ethernet market to take off as hoped.

Details of the spec need to be hammered out. Forum spokespeople say that a first draft spec is aimed for completion by February, with a final version due out in summer 2002.

The group also has started to define a QOS framework for Ethernet, within a set of predefined Ethernet services.

The Metro Ethernet Forum is one of two groups at the forefront of efforts at developing low-cost alternatives to ATM and Sonet/SDH for metro networks. The other group, the Resilient Packet Ring Alliance, has been pursuing its own standard within the Institute of Electrical and Electronics Engineers Inc. (IEEE). But industry sources say a range of issues, including higher cost, have brought RPR's goals into controversy, at least temporarily (see RPR: RIP?).

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com
toll booth willy 12/4/2012 | 7:37:34 PM
re: Gigabit Ethernet: Hope vs. Hype Good Point
lightmaster 12/4/2012 | 7:37:40 PM
re: Gigabit Ethernet: Hope vs. Hype "XO has 10/100 and GBit E"

XO offeres GigE, but the CEO is on record as saying that there isn't much demand for it.
metrodude 12/4/2012 | 7:37:40 PM
re: Gigabit Ethernet: Hope vs. Hype http://www.lightreading.com/do...
tobinsmith 12/4/2012 | 7:37:49 PM
re: Gigabit Ethernet: Hope vs. Hype XO has 10/100 and GBit E, they offer the product not only for Metro users, but also between "XO-lit" cities.

http://www.xo.com/xofferings/d...
rjmcmahon 12/4/2012 | 7:37:50 PM
re: Gigabit Ethernet: Hope vs. Hype who cares?
__________

We all should. His posts have added value for those who can see through the mud.

-Bob
poster 12/4/2012 | 7:37:51 PM
re: Gigabit Ethernet: Hope vs. Hype who cares?
zipple 12/4/2012 | 7:37:55 PM
re: Gigabit Ethernet: Hope vs. Hype Too much talk about transceivers, BER and other ancient-operator/vendor oriented stuff...
______________________________

Put it in the same category of other "ancient-operator/vendor" stuff like gross margin, earnings, and other ancient figures of merit.

Maybe we're just in a retro era.
Scott Raynovich 12/4/2012 | 7:37:56 PM
re: Gigabit Ethernet: Hope vs. Hype Mudd wrote:
>Except for Yipes, Cogent and Telseon no ther >vendor has committed to using Ethernet in the >metro environment.

-----

Actually, Qwest and Broadwing have announced Ethernet services. Not sure what happened with these, but I will follow up:

http://www.lightreading.com/do...
Multiplex 12/4/2012 | 7:37:56 PM
re: Gigabit Ethernet: Hope vs. Hype While Pioneer is clearly not going to post its entire report, perhaps it would be willing to share the underlying assumptions about market penetration and available market for Ethernet. It will be easier to see whether there is any sense behind the hype that way.

How about it Mr. Peterson?

metroman 12/4/2012 | 7:37:58 PM
re: Gigabit Ethernet: Hope vs. Hype To complete the list of announced (and there are plenty that are unnanounced) Gig Ethernet deployments: Completel, Catch Communications, NeoNetworks, Storm Telecom, Hutchinson Global Crossing, Huacom.... I know of many who are seriously considering Gig Ethernet in the metro in many countries.

Even with this growth I think that Pioneer have their numbers confused. No service provider has the money (or the stupidity) to replace existing revenue generating infrastructure with a brand new solution. This is why we see the "Greenfield Teir 2" providers take up Ethernet as they can get into the market quickly and cheaply. Incumbent and Teir 1 carriers have a different problem, an installed base to provide services to.

Pioneer should discuss how the Teir 1s will make this transition and therefore make the revenue numbers a reality rather than just making this swap a forgone conclusion.

Gig Ethernet makes a great deal of sense. It's shortcomings are being addressed but not at the expense of delivering customers products today. This is the mistake that SONET heads make, assume that the product is useless unless it has the same features. .....Then it would be the same product.... and would not be able to differentiate itself.

VHS vs BETAMAX anyone!!!

More discussions on the moves to make Ethernet more acceptable for the Service Provider and Metro Markets can be found at the Metro Ethernet Forum.
http://www.metroethernetforum....

Metroman
gilra1 12/4/2012 | 7:37:58 PM
re: Gigabit Ethernet: Hope vs. Hype

Guys, did you ever meet a customer?

Too much talk about transceivers, BER and other ancient-operator/vendor oriented stuff...

What customers want is cheap & simple interconnection services for their Ethernet LANs, regardless of service providers legacy problems.

Has SDH provided a solution for customer requests? Everybody knows that NO. Gig-Ethernet has a chance to become the solution but is facing refusal coming from the old telco world.

Please, forget industry common beliefs: they have taken the telecommunications market almost to bankruptcy!
rjmcmahon 12/4/2012 | 7:38:00 PM
re: Gigabit Ethernet: Hope vs. Hype Worry not. While Mudd does require some hard work, there's enough fun to be had.

Tony Li
HMC '82
__________________________________

In my life experiences, the participants have had the most fun when someone was able to find some altruism to balance out our egoism.

-Bob
tony1athome 12/4/2012 | 7:38:01 PM
re: Gigabit Ethernet: Hope vs. Hype Someone should teach these kids how to dance and how to catch a ball. Life's way too short to forget about having some fun along the way.
--------------------------------

Worry not. While Mudd does require some hard work, there's enough fun to be had.

Tony Li
HMC '82
rjmcmahon 12/4/2012 | 7:38:03 PM
re: Gigabit Ethernet: Hope vs. Hype Below came from http://www.hmc.edu which seems to be a college trying to create the next Einstein. Someone should teach these kids how to dance and how to catch a ball. Life's way too short to forget about having some fun along the way.

-Bob

Who Is Harvey Mudd?

Harvey Seeley Mudd, for whom Harvey Mudd College was named, has been described as "a thinker, a patient builder, and a self-reliant scholar."

Mr. Mudd was a mining engineer and a graduate of Stanford and Columbia universities. He served as the president of the American Institute of Mining and Metallurgical Engineers. With his father, he founded and later became president of Cyprus Mines Corporation. Their Los Angeles-based international enterprises began with the development of the copper mines on the island of Cyprus.

Harvey S. Mudd had a particular interest in The Claremont Colleges and served as Chairman of the Board of Fellows of the Claremont University Center for a quarter of a century. While serving in that position, he helped plan for the undergraduate college of science and engineering that was to become Harvey Mudd College. The Harvey S. Mudd Merit Award is named for this remarkable man.
rjmcmahon 12/4/2012 | 7:38:03 PM
re: Gigabit Ethernet: Hope vs. Hype In the end, I think Ethernet is really a low-cost best effort data-moving standard that may have a hard time becomming the focus of "next-gen" broadband, packet-based networking.
_____________________________________________

At the end of the day, its hard to see anything other than Ethernet over fiber reaching both homes and businesses. Everything else will remain too expensive, and ethernet will just propagate out from the local networks (and their attached devices).

-Bob
rjmcmahon 12/4/2012 | 7:38:04 PM
re: Gigabit Ethernet: Hope vs. Hype Guys,

I get the feeling the Muddster is a gifted teenager acting out against his parents (or against boredom). I don't get the impression he is really interested in helping change things, even though he may have the skills to help. The "belonging" part may be missing, not that I know anything about therapy.

-Bob
rjmcmahon 12/4/2012 | 7:38:04 PM
re: Gigabit Ethernet: Hope vs. Hype Except for Yipes, Cogent and Telseon no ther vendor has committed to using Ethernet in the metro environment. Cost alone is not alone to tear down the Sonet/SDH rings currently deployed. There is no credible performance data that addresses the issue of TDM traffic. Currently, there are limited number 10 GbE vendor equipment.
______________________________________________

This analysis suggests you to believe that TDM traffic will be the revenue generating traffic for GE in the MAN. Why do you believe this? Computer traffic seems more interesting traffic to me.

-Bob

PS. Most RR owner's never believed pipelines would ever threaten their oil transport traffic. (You know, it seemed like pipe dreams to them) It happened.

RR owners then became worried that no traffic was safe. The were even threatened by a coal slurry pipeline, a scheme to pulverize coal, mix it with water, and move it trough a pipe; these pipelines were never widely used.
gea 12/4/2012 | 7:38:04 PM
re: Gigabit Ethernet: Hope vs. Hype Well, I am the first one to point out that there's HUGE amounts of hype related to Ethernet, and Pioneer's report only exacerbates this trend.
I also believe that SONET is moving right along in its transition towards support for shared media (indeed, by the time you see Ethernet make it out into the WAN, it'll find that Packet-Over-SONET has already gotten there and dominated the backbone).

That said, there's actually a lot to be said for Ethernet, though there's still a very long way to go. The most important thing is that Ethernet has learned how to function quite comfortably as a shared medium, and does so from the relatively simple standpoint of Layer2. There's a simplicity to it, combined with a large talent pool and costs that have really entered a near-Moore's law curve vs time. Given that, Ethernet may actually begin to displace SOME SONET in the MAN, despite the current environment.

In the end, I think Ethernet is really a low-cost best effort data-moving standard that may have a hard time becomming the focus of "next-gen" broadband, packet-based networking. But then again, if circuit-switched telephony survives, it may not need to.
HarveyMudd 12/4/2012 | 7:38:05 PM
re: Gigabit Ethernet: Hope vs. Hype Except for Yipes, Cogent and Telseon no ther vendor has committed to using Ethernet in the metro environment. Cost alone is not alone to tear down the Sonet/SDH rings currently deployed. There is no credible performance data that addresses the issue of TDM traffic. Currently, there are limited number 10 GbE vendor equipment.

Currently none of the Gigabit Ethernet vendors such as Appian, Lantern, Nortel, Luminous, etc, have any significant market share.
Steeler 12/4/2012 | 7:38:05 PM
re: Gigabit Ethernet: Hope vs. Hype Harvey, I agree that Ethernet hype has gotten out of control, but there are plenty of other carriers buying Ethernet switches. Korea Telecom, Telia (Swedish PTT), Intellispace, Qwest, and Broadwing just to name a few. Nortel has had moderate success selling their Ethernet products overseas and to enterprises. I also don't understand why you list those startups when Cisco, Riverstone, and Extreme are the leading vendors.
gea 12/4/2012 | 7:38:06 PM
re: Gigabit Ethernet: Hope vs. Hype Harvey Mudd:
Do you ever say anything positive?

Do you really think Pioneer consulting would post a copy of their report? Who then, would buy it? That IS how they pay their bills, after all.
HarveyMudd 12/4/2012 | 7:38:07 PM
re: Gigabit Ethernet: Hope vs. Hype Dear Mr. Peterson:

You have inherent conflict of interest and your views cannot be considered to be objective. You are simply interested in selling reports. You have never validated the contents of your report, neither have you a posted a copy of your report for feedback.
wino 12/4/2012 | 7:38:12 PM
re: Gigabit Ethernet: Hope vs. Hype I believe the key word to all of this is
'marketing', which usually has nothing to do with reality. The market research usually reflects the
'that's neat and we would like to have it' reply
from executive management. The reality side says
'we have it but it costs too much'. Which one
is going to win ? we'll see......
leathert 12/4/2012 | 7:38:13 PM
re: Gigabit Ethernet: Hope vs. Hype Douglas,

I think a clue is required here. I would not take negative posts to instantly be some Gartner plant. Until a few weeks ago I was an Architect for the largest Broadband network on the planet, all IP, NO circuits or 911 voice, and until Ethernet takes a few clues from SONET, like BER and LOS on the optical interface (like we have told MRV and Finisar many times), you simply cant get the diagnostics on Ethernet to match POS.

Lewis Eatherton
frmr Architect, Strategic Engineering
[email protected]
donethat 12/4/2012 | 7:38:13 PM
re: Gigabit Ethernet: Hope vs. Hype Wow! A lot of good stuff being discussed here. I'm now an independant consultant (after a 25 year career in optics at a major vendor) and two years ago I accepted a job working for one of the major Consulting Companies, researching and writing a report on an upcoming optical technology. From my experience, I know what it takes to introduce new technology to the major carriers, and reflected these difficulties in my report. That's when I found out these companies don't want the truth..they want rosy optimism that reflects their role as cheerleaders for the industry. They basically re-wrote my report (it turns out I was not pessimistic enuff!)and now they must look pretty silly. It's totally amazing to me that people will pay for this garbage.
gea 12/4/2012 | 7:38:14 PM
re: Gigabit Ethernet: Hope vs. Hype Oops! Starting to feel a little cheesy, methinks...

"The anonymity of these comments strongly suggests the handiwork of rival market research firms or proponents of competitive technology"

Well, for anyone in the optical networking industry who's been around for more than a year or two, my initials make it fairly easy to determine who I am. But I work for a company that builds Metro Ethernet switches, and even I find those numbers silly.

Those numbers, along with Ethernet true believers, seem to rely on the following equations:

1) SONET=circuit switching
2) IP/data=Ethernet.

Would Pioneer consulting care to comment on why they feel that POS (Packet over SONET), for instance, will be wiped out by Ethernet? And don't cheat now...this is POS in concatenated OC-48s and OC-192s (as well as OC-3/12 of course) already rapidly becomming the standard in backbone transport (this is what 'IP over Optics' means in most trade blurbs).

By assuming "Ethernet everywhere" in their report (pretty much the only way to come anywhere near those numbers), Pioneer seems to be proclaiming the death of Layer 3 networks.Death of Layer 3
optigirl 12/4/2012 | 7:38:15 PM
re: Gigabit Ethernet: Hope vs. Hype Then again, I'm familiar with the saying, "There's no such thing as bad publicity"

or how about

"Denial is not a river in Egypt."

Douglas, and I really mean this in the nicest way, it is not a good idea to use outrageous hype to make name for yourself. When Mr. Chen even snickers at your numbers you should probably feel a bit silly. I know that the market needs good news and if there was something that you could point to that would make us change our mind we certainly would.

Until then.....

Lay of the weed, would ya?

:-)

Becca
dietaryfiber 12/4/2012 | 7:38:15 PM
re: Gigabit Ethernet: Hope vs. Hype
The total 2005 revenue from these products equates to about $40B.

Now lets see....current estimates of all US CAPEX next year is about $75B. Lets triple that for a worldwide CAPEX of $225B. Then lets grow that 10% a year to get to a Global CAPEX number of about $300B.

This is implies that 13% of the total telecom spend in the year 2005 is 1 GigE and 10 GigE products. From a base of much less than 1%. This sounds completely unreasonable on the face of it.

Apologies to Pioneer Consulting about the quality of their report and my analysis of it. Have a nice day.

dietary fiber
glass 12/4/2012 | 7:38:16 PM
re: Gigabit Ethernet: Hope vs. Hype I would venture to guess that over 95% of GigE shipments projected are within data centers, LAN and campus backbone, as opposed to in the metro core or the WAN. A lot of the GigE bashing may stop if Mr. Peterson would be kind enough to shed some light on the split of GigE shipments that his firm is forecasting. I tend to agree with a lot of what is said in previous messages - the GigE in the metro/WAN is going to be a small percentage over the next few years.
lightcreeping 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype For example?

Don't you believe that prices of all gear are falling? Have fallen? Vendors are still working through a glut of equipment.

l8tereader 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype We should be careful to discern between VALUE falling like a rock and the PRICE (where price equals the cost to produce) of an item ;-)
poster 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype Douglas, are you guys doing PR consulting for the Taliban? the logic here looks similar. broad, unsubstantiated claims which when challenged, you vehemently defend, then respond with accusations of infedels and declare a holy war.



fresh 12/4/2012 | 7:38:19 PM
re: Gigabit Ethernet: Hope vs. Hype Pioneer Consulting welcomes the attention focused on its new Gig-E market report.

We are convinced that Gig-E represents a sizeable market opportunity for equipment vendors -- even when the impacts of the current economic slump are factored in.

At the same time, we must sadly note the unconstructive tone of certain comments anonymously submitted. The anonymity of these comments strongly suggests the handiwork of rival market research firms or proponents of competitive technology. Accordingly, we urge readers to consider the source.

Douglas Peterson
President
Pioneer Consulting, LLC.
Tel. 617-424-5200
http://www.pioneerconsulting.c...
flanker 12/4/2012 | 7:38:19 PM
re: Gigabit Ethernet: Hope vs. Hype ...there's no inherent reason SONET prices can't fall down dramatically...

Yes, SONET card prices ARE dropping like a rock.
poster 12/4/2012 | 7:38:21 PM
re: Gigabit Ethernet: Hope vs. Hype I have to agree with Optigirl on this one. Once again: time for a reality check people! The hype-meter is screaming here. agreed that there are many inefficiencies in the current solutions (SONET) and that these technologies, and the way they are being implemented into some next-gen gear, are evlolving rapidly to solve some of inefficiencies. (particularly 10GbE) but the numbers and projections these people are talking about are pure hype. they're talking broad deployment into the public network - it simply doens't happen like that! think about how long it takes for something to be deployed on wide scale in the public network. SONET is just peaking now, maybe last year, in the height of the biggest all time network build out. that technology has been around for 15+ years. RBOCs and the largest telcos, which are the only way to justify these numbers, just don't operate like that. again, Optigirl's statement about DWDM is case in point.

nevermind 12/4/2012 | 7:38:22 PM
re: Gigabit Ethernet: Hope vs. Hype These kind of ridiculous growth projections and hype are what led us to the recent collaspe. I figured the cycle would repeat but I also figured that it would take a year or two before it started again.

nevermind
gea 12/4/2012 | 7:38:25 PM
re: Gigabit Ethernet: Hope vs. Hype Optigirl you GO girl!

That same report claims that by 2005 the total worldwide market for Ethernet stuff will be like 145 BILLION. After talking to my Wall Street buddies, my suspicions on this are confirmed: that number only makes sense if just about every interface on every piece of gear becomes Ethernet and SONET equipment sales magically turn into Ethernet. Metro Ethernet is about $350 million this year, SONET is $5.5 BILLION. Could it be there's good reasons for that? This Pioneer consulting read a lot of marketing hype about Ethernet vs SONET and never got past the surface.

Look--my company makes Ethernet stuff for metro environments, and I know Ethernet's got a long way to go. All this silly talk about ethernet being cheaper is based on the idea of taking a $300 switch out of a computer room, sticking it in a CO and thinking that's going to be fine! Ethernet has some real advantages that are not yet easy to come by in the SONET domain, but there's nothing inherent about that, and that is already changing.

Just take a look at the price of LR transceivers--the GbE transceiver price is the same as an OC-48 transceiver price now, but per bit that's twice the cost! (ie, GbE is about half the bit rate of OC-48.) As GbE comes to be deployed in the service providers networks, there's no inherent reason SONET prices can't fall down dramatically (while Ethernet prices for Metro rise as Ethernet companies learn what it means to build a carrier-grade switch).

In the end, Ethernet's going to proliferate, but its not going to kill SONET any time soon. Meanwhile, SONET and Ethernet will continue to merge on some fronts (like 10GbE...I predict that will trickle down to a 2.5GbE with SONET framing in the near future).

So...Fiber-r-Us...let's hear your spiel...
lightmaster 12/4/2012 | 7:38:26 PM
re: Gigabit Ethernet: Hope vs. Hype Optigirl is being kind. There are so many violations of basic logic in these numbers that it boggles the mind. I would love for the author to address his methodolgy for coming up with these numbers. I suppose he interviewd the VP of marketing at YIPES?
optigirl 12/4/2012 | 7:38:27 PM
re: Gigabit Ethernet: Hope vs. Hype So let me get this straight....

8 fold growth, 30% from 10GigE links but it will only happen when Ethernet reaches carrier grade reliability? I take it that the forecasters here believe that issue will get sorted out.

How many times have we heard the story that a technology is going to take off (but only after we handle that minor detail about meeting carrier standards)?

I find this "assumption" to be somewhat wishful in its thinking. We have been hearing about DWDM for 5 years now and there is not a whole lot going on in the metro space. Sonet is still king and if anyone expects Bell Companies to start deploying a "new" technology that quickly then they are not in tune with where the market is. GigE in the campus makes perfect sense but in the public network????? Has anyone at this company any appreciation for history?

Show us Fiber to the building and a lot of ESPs that have solid financial situations and maybe we should all take this seriously.

Sorry boys..... I hear better BS on Saturday nights out on the town!!!
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