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Having identified the main factors that will likely influence the demand for Carrier Ethernet and also the nature of this influence (direct/indirect, positively/inversely), a brief assessment of the developments in their respective areas helps gauge the extent of their impact over the course of the next few years These are captured in Table 169 Commercial applications will be the primary and direct, drivers for Carrier Ethernet services; some of the key existing and emerging applications that are expected to drive Carrier Ethernet are shown in Figure 167 and briefly discussed below Individual (category of) applications could of course be delivered by other means (than over a Carrier Ethernet service, perhaps even more optimally) but as should be evident from the figure, Carrier Ethernet is expected to be the optimal solution
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Applications driving Carrier Ethernet
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TABLE 169 How Demand for Carrier Ethernet Will be In uenced in the Future Variable Applications (driving Carrier Ethernet) Expected In uence on Carrier Ethernet demand Direct, + Key Developments in the Next 3 5 years VOIP extending widely,video and other bandwidth intensive multimedia applications becoming the norm Conclusion Signi cant growth in demand
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100G standards being developed Huge growth in demand Distance extending over several thousand km Carrier Ethernet attributes increasingly incorporated in commercial solutions ATM and Frame Relay are increasingly weak options Fear of the unknown remains but Carrier Ethernet has advantage of incumbency Urgent need for improvement to make services pro table Marginal negative impact on demand (depends on how fast Carrier Ethernet is embraced) Huge potential to stimulate demand for Carrier Ethernet which in turn will improve economics (due to scope and scale)
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Direct, +, Reinforcing
Fiber Deployment (Service Provider) Competition Standardization
Direct, +, Reinforcing Indirect, both and + Direct, +, Reinforcing
Rapid deployment, offset in some Fairly signi cant growth in areas by wireless substitutes demand Intensifying across the board in the US and worldwide MEF and other bodies accelerating development of standards Expected to be low Fairly signi cant growth in demand Signi cant growth in demand Largely unknown
Regulation
Direct, Unknown
Evolution of Carrier Ethernet Solutions
Emerging Applications 1 year Foundation IPTV Broadcast VOD PVR/Time shifting Driving App P2P Web Streaming TDM Packet voice starts Over the top VoIP HSI 2 4 years Enhanced IPTV Network PVR Internet to TV/Video ASP Targeted Ads Place shifting P2P video distribution Partner P2P Ubiquitous wireless access 5 10 years
IPTV
Mobile
Basic voice EVDO, streaming L2/L3 MPLS VPN E-LINE E-LAN
WiFi/Cellular FMC Packet/SIP Voice, S/BC Video conferencing Presence Single number Multimedia on Demand 3G
Voice
Any service, any screen Fully personalized Integrated applications Multimedia FMC
App Aware VPN BW on Demand Customer self monitor
Figure 167 Emerging applications and their evolution (source: MEF)
for the entire set of wired/mobile applications; hence these applications will drive the demand for Carrier Ethernet
Voice / VoIP Even though VoIP has been already established as a viable alternative to traditional voice delivery (over a TDM infrastructure), it is likely to make even more significant inroads into the voice services market, which still accounts for a very large portion of the telecom services market TheInfoPro (TIP) predicts over 2/3rds of enterprises will eventually originate and terminate their voice traffic on VOIP equipment (as opposed to only 15% in 2007) IPTV / Video Newer video-based applications will proliferate to a much larger extent over the next few years All the traditional telephony providers in North America have announced that they already are or will shortly deliver IPTV, to counter the Cable/MSOs and make in roads in to the latter s traditional market In addition, the phenomenal success of commercial video streaming applications like You Tube (recently purchased by Google) will invariably spur significant innovation in this specific area Business Applications / Enterprise Storage Given the enormous amount of mission critical and sensitive data that is being generated at enterprises, as well as
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concurrent developments in the area of server consolidation due to virtualization, back-up storage (to remote locations or data centers) will become much more common place than ever before And with most of the servers in an enterprise coming with Ethernet interfaces, and Ethernet becoming a viable candidate for high-speed data transfers, Carrier Ethernet services will inevitably be used increasingly (as opposed to traditional storage specific solutions such as Fibre Channel etc)
High Speed Internet (HSI) / Internet Access The number of shared, bandwidth intensive and business enabling applications (accessible) on/through the public Internet (or the web ) will inevitably increase; this, along with the increasing importance of the end user experience (which is becoming less tolerant to delays etc) will drive the need for higher speed Internet access Mobile / Wireless backhaul As mobile/wireless applications will continue to explode, and new bandwidth intensive applications proliferate (increasingly personalized, streaming and web enabled), wireless Service Providers will have to focus on reducing the cost of the transport between the cellular base stations and their POPs/COs (where they aggregate traffic from base stations and transport on their backbones) since this is/will be a significant component (estimated variously at nearly 25%) of the overall cost Whether it will employ existing T-1/Copper infrastructure to back haul this traffic from the base stations to the CO or fiber or even other wireless solutions (such as WiMAX), it is clear that Carrier Ethernet will play an important role The newer (4G) base stations designed to support mobile broadband have Ethernet interfaces and will cost effectively transport Ethernet natively, while older base stations may still employ T-1 interfaces but will be carried using Ethernet back haul (aggregating multiple T-1s and using circuit emulation)
Ultimately, these and other new applications will increasingly have at least some or all of the following characteristics: they will consume higher (and possibly symmetrical) bandwidth to offer a tolerable end user experience, they will have (near) real-time component (ie, they may be increasingly interactive in real time), be delivered over longer distances (ie, widely available and to multiple sites) and will involve voice, data, video streaming (especially video, since it will be the most effective communication in widely distributed enterprise organizations) To be able to deliver this broad range of applications optimally over a Service Provider infrastructure is what would likely make Carrier Ethernet a very appealing choice (these reasons are discussed in some detail in 1) Improvements in technology are expected across multiple dimensions and are briefly described next These improvements are primarily driven to support the commercial applications discussed previously and, more broadly, to optimize Service Provider networks
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