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Level 3: Vendors Should Lower Opex

NEW YORK -- Packet-Optical Transport Evolution -- Service providers need more vendor help in reducing the operating costs of running their networks, and a big part of that is greater interoperability, Paul Savill, senior VP of transport and infrastructure services at Level 3 Communications Inc. (NYSE: LVLT), said here today.

Equipment vendors have been aggressive in reducing the cost-per-bit of their optical equipment, Savill said, packing more functionality into smaller and cheaper boxes. But if those boxes consume more power and give off more heat -- therefore requiring more air-conditioning -- then some of that capex savings is lost, Savill said.

"Space and power are becoming more and more significant in the total cost structure," Savill said. "The equipment we are deploying is getting smaller and can deliver twice as much bandwidth, but it is still sucking down the same power and cooling [of the bigger boxes] so we can't use the additional space we save because our sites are power-constrained."

Service providers also need packet optical equipment to have better hooks into their operations and support systems, to enable things such as customer self-service and to make operations more efficient, Savill said.

"Today, we let customers provision their own circuit, but it's a very non-elegant solution," Savill. "So with each new vendor, we face a whole new development effort that is time-consuming and expensive. We need hooks into our OSS systems to be more standardized. We need hooks into our network management systems that are multi-vendor."

Service providers themselves need to develop some level of standardization to enable end-to-end delivery of service over multiple networks, Savill said.

"We have a role to play here as well, but anything vendors can do will help give us a leg up," Savill said.

Vendors thus far have done a better job of reducing capex than opex, he added, and that is a problem for companies such as Level 3, that support a wide range of services from lower-level voice to high-definition video.

"We have to do more than just efficiently carry a static base of services," Savill said. "The harder part of it is that there is constant flux on our network. Roughly 5 percent of our circuit base provided off these optical platforms is in flux, due to disconnects, new orders, or customers making changes."

In addition, at the edge of the network, service providers have to adapt more to customer-specific applications, and support more at the edge over their converged aggregated ports.

"Services are not going away, but they are evolving, and we need to be able to provide them efficiently over common ports, accessible to the wide area," Savill said. For example, newer cloud computing services require greater awareness within the network of the type of traffic being carried, and network-based storage will need newer storage-specific interfaces on network gear.

Any effort to deliver equipment that helps service providers scale their networks has to take these changes into account and help service providers manage growing complexity, he said.

— Carol Wilson, Chief Editor, Events, Light Reading

eylons 12/5/2012 | 4:35:19 PM
re: Level 3: Vendors Should Lower Opex

A typical vendor approach is to start and develop a maximum-performance-maximum-cost products. For those high-end products performance is more important than power consumption. Afterwards, reusing the same architecture/hardware/software is done for smaller and other variants of the original product. The result is a portfolio that is consuming too much power consumption.  

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