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The Growth of Business Ethernet Services

The Growth of Business Ethernet Services

The increasing use of data and fiercely price-conscious and multimedia-hungry business subscribers can limit revenue opportunities for the network provider industry. Providers must therefore look elsewhere to grow their customer base, open new revenue streams, and boost margins. So how can they adapt their business strategies and achieve growth objectives?

Just as operators scale up high-capacity data center interconnects to cope with these needs, providers can add Ethernet services for high-capacity services. These can offer a differentiated and competitive service to corporate customers, ranging from 1G to 100G and beyond. Not only will Ethernet services add a cost-effective alternative to existing services, but they also ensure business Ethernet offerings are set up to complement wide area networks and hybrid network services.

According to Ovum, the global enterprise Ethernet services market will grow at 10.7% CAGR, exceeding $70bn by 2020 (Ovum’s Ethernet Services Forecast, Sep 2015), and is now the de facto wide-area network data connectivity technology. Ethernet will be a significant portion of the data service market driven by enthusiasm for higher bandwidth services. This growth will continue as we adopt more cloud-based applications and enterprises embrace digital transformation. Business Ethernet solutions can be further boosted with tunable DWDM transceivers.

Towards Carrier Ethernet

With applications and data volumes exploding in organizations of all types and sizes, there is an increasing need for 1GbE+ connections, with 10GbE+ connectivity for company headquarters and even 100GbE+ connections for data center connectivity. Specifically, demand is being driven by the proliferation of bandwidth-hungry applications. An MRI scan, for example, can be a 300GB file, which would take around 7 hours to download over a 100Mbps connection. Over a 10GbE link, that time falls to just 4 minutes and 28 seconds on a 100GbE link – this can be the difference between life and death when a consultant needs to make a time-critical decision on how to treat their patient best.

Enterprises know all about cost-containment and budget constraints. Virtual private networks (VPNs) based on legacy MPLS protocols have their place when delivering wide-area connectivity. These VPNs can offer any-to-any connectivity and scale to thousands of sites – but, at the higher speeds needed for high-bandwidth applications, they can be significantly more expensive than business Ethernet to deploy and maintain.

In addition, the MPLS routers needed for IP VPN have acquired more and more protocols and complexity over the last few decades. The cost of implementing all of these protocols, and securing them against attack, has driven leading service providers to demand a radically more straightforward way of building networks.

With business Ethernet, the network infrastructure and management can be unified under Ethernet protocol, making the network easier to plan, deploy and manage at scale. This means fewer routers, more remotely programmable services, and fewer truck rolls resulting in a lower cost per bit than comparable VPN solutions. These savings scale across 1GbE, 10GbE, and 100GbE connections with less CAPEX investment, helping to increase the predictability of delivery costs over time. WDM solutions can further boost this capacity.

Towards a Coherent Upgrade with 100ZR

Almost every organization uses the cloud in some capacity, whether for development and test resources or software-as-a-service applications. While the cost and flexibility of the cloud are compelling, many IT executives overlook the importance of fast, high-bandwidth wide-area connectivity to make cloud-based applications work as they should.

These needs might require businesses with huge traffic loads to upgrade to 25G, 100G, or even 400G speeds. These capacity needs would require coherent technology. Fortunately, advances in electronic and photonic integration have miniaturized coherent line card transponders into pluggable modules the size of a large USB stick.

Many of these business applications will require links between 25 Gbps and 100 Gbps that span several tens of kilometers to connect to the network provider’s headend. For these sites, the 400ZR pluggables that have become mainstream in datacom applications are not cost-effective when utilization is so low. This is where 100ZR technology comes into play.

100ZR is currently a marketing term for a short-reach (~80 km) coherent 100Gbps in a QSFP pluggable. Targeted at the metro edge and enterprise applications that do not require 400Gbps, 100ZR provides a lower-cost, lower-power pluggable that also benefits from compatibility with the large installed base of 50 GHz and legacy 100 GHz DWDM/ROADM line systems.

Self-Tuning Makes Management Easier

Businesses that need to aggregate many sites and branches into their networks will likely require tunable transceiver solutions to interconnect them. The number of available channels in tunable modules can quickly become overwhelming for technicians in the field. There will be more records to examine, more programming for tuning equipment, more trucks to load with tuning equipment, and more verifications to do in the field. These tasks can take a couple of hours just for a single node. If there are hundreds of nodes to install or repair, the required hours of labor will quickly rack up into the thousands and the associated costs into hundreds of thousands. Self-tuning modules significantly overcome these issues and make network deployment and maintenance more straightforward and affordable.

Self-tuning allows technicians to treat DWDM tunable modules the same way they would grey transceivers. There is no need for additional training for technicians to install the tunable module. There is no need to program tuning equipment. There is no need to obsessively check the wavelength records and tables to avoid deployment errors on the field. Technicians only need to follow the typical cleaning and handling procedures, plug the transceiver, and the device will automatically scan and find the correct wavelength once plugged. This feature can save providers thousands of person-hours in their network installation and maintenance and reduce the probability of human errors, effectively reducing capital and operational expenditures (OPEX).


With business Ethernet, one can set up super-fast connections for customers and connect their locations and end-users with any cloud-based services they use. Business Ethernet solutions can be further boosted with tunable DWDM transceivers. If business future-proof their networks with upgrades like 100ZR transceivers, they can scale up connectivity seamlessly to ensure that applications always provide an excellent end-user experience. That connectivity is never a limiting factor for customers’ cloud strategies. As the business sector seeks to upgrade to greater capacity and easier management, tunable and coherent transceivers will be vital in addressing their needs.

Corlia van Tonder

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