Enterprise Ethernet services are booming: According to recent reports by Vertical Systems Group, the global business Ethernet services market will reach nearly US$ 39 billion in 2013, with double-digit annual growth across all geographic markets. Despite the current economic turmoil, more and more business Ethernet services are becoming available on metro, national and international scales.

Yet service providers face some challenges in helping enterprise customers embrace Layer 2 VPNs’ higher bandwidth rates, competitive pricing, flexibility, and scalability. These translate into the essential building blocks of new Ethernet service offerings, and generally are grouped in four categories:

• Customer migration to Layer 2 VPNs
• Connectivity and service reach
• SLA management for differentiated services
• End-to-end visibility and control for proactive monitoring and in-service troubleshooting

Figure 1: Essential building blocks of new business Ethernet service offerings

When supported by intelligent Ethernet demarcation devices at the service hand-off points, these building blocks can enhance customer retention and provide growth potential for the carrier.

Despite the current economic turmoil, more and more business Ethernet services are becoming available on metro, national and international scales.

Customer Migration to Layer 2 VPNs: Overcoming the Reservations of ICT Managers
When adding Ethernet VPNs to their service mix, carriers are often required to differentiate them from the currently more common IP VPNs. A typical comparison is featured in Table 1:

Table 1: Comparison of Layer 2 and Layer 3 services from an access network perspective

It is important that CIOs and ICT managers understand how these benefits relate to their particular business objectives. For example, companies that are reluctant to hand over the control of routing information to service providers and which require tighter WAN security will find Ethernet VPNs more appropriate. Likewise, fast-growing businesses in highly competitive markets, for whom always-on connectivity and operational agility are critical, will appreciate the advantages of Ethernet’s inherent support for quick site addition and bandwidth upgrades that involve minimal disruptions to core operations. Another key factor is the reduced TCO (total cost of ownership) of Layer 2 VPNs and Ethernet-based access, including cost-effective customer located equipment (CPE), incremental expenditures on multi-site connectivity and lower price per Mbps, as well as Ethernet’s “pay as you grow” flexibility, which allows businesses to purchase the bandwidth they need and easily upgrade it as their needs evolve.

By enabling the delivery of multiple services and applications over the same access link, Carrier Ethernet access and intelligent demarcation devices allow enterprises to use a single-box solution from a single provider for all their networking requirements, including Layer 2 and Layer 3 VPNs, dedicated Internet access and VoIP services, as well as local and long-distance data connectivity (LAN-to-LAN). This simplifies IT operations and reduces the number of CPEs organizations need to purchase.

Service Reach: Ensuring Consistent User Experience over Any Access
While FTTB (fiber to the business) deployments are gaining traction, most enterprises, especially those outside metro areas, are still served by PDH, SDH/SONET or xDSL. In fact, most service providers employ a combination of several access technologies, and it is not uncommon for an enterprise customer with distributed operations to require service connectivity between locations using different technologies. To become mainstream, business Ethernet services must be delivered transparently across the carrier’s footprint. As illustrated in Figure 2, interoperable carrier-grade demarcation devices allow telecom providers to start their service over fiber and terminate it over bonded DSL copper without affecting service attributes.

Figure 2: Ethernet Services over Any Access

Traffic and SLA Management: Guaranteeing Customized Service Quality
Before they migrate to new Ethernet services, enterprises need to be assured that they’ll receive SDH/SONET-like reliability with appropriate resiliency, quality of service (QoS) and performance guarantees to support critical applications, expecting the same service consistency offered by legacy TDM, ATM and Frame Relay. They also demand service differentiation to facilitate efficient operations and meet their business needs, both current and future. The extensive standardization work carried out by vendors, operators and leading industry organizations, including the MEF, IEEE, ITU and IETF,has contributed significantly to Ethernet’s acceptance as a carrier-class access service and transport network.

The key to implementing carrier-class Ethernet in the access is the deployment of intelligent Ethernet demarcation devices. Also known as NIDs or EDDs, these devices are installed at the user premises to permit carriers to deliver customized offerings with multiple classes of service, while introducing new revenue generators. EIR (excess information rate) services enable them to generate more revenues from a given network without compromising the quality of premium or real-time CIR (committed information rate) services, such as VoIP and video. Since bandwidth consumption fluctuates throughout the day and the week, service providers can oversubscribe the network and monetize unused portions of it by selling “Best Effort” services and allow total bandwidth charges to exceed actual infrastructure rates, provided that the customer-located demarcation devices are equipped with reliable traffic management capabilities.

End-to-end Visibility and Control: Increasing Service Uptime with Proactive Monitoring
For carriers to ensure that service performance objectives are met in accordance with the contracted SLAs, they need to extend control throughout the entire service path and into the user premises. This requires OAM (operations, administration and maintenance) functionalities at the Ethernet demarcation devices, including automatic performance measurements, diagnostics and statistics, as well as remote error detection and troubleshooting. These enable service providers to localize faults, identify affected services and take remedial actions quickly to meet customer expectations for minimal MTTR (mean time to repair) and short downtimes. Moreover, proactive monitoring of service quality on an on-going basis helps service providers identify network problems before they escalate and minimize their effect on users. By analyzing typical traffic profiles over time, carriers can also anticipate network congestion in advance and advise customers when additional bandwidth purchase is recommended.

Reaping the Benefits of Carrier Ethernet Services
Telecom providers must deliver measurable and enforceable SLAs that detail commitments for performance and availability. This requires intelligent demarcation devices that are equipped with Ethernet SLA support tools, including advanced service delivery and service assurance capabilities over any access network, as shown in Figure 3:

Figure 3: Service delivery and assurance from the user premises

With operators the world over embracing Ethernet as far more than a “Best Effort” service, business solutions are being rolled out to encompass next-generation services that are cheaper to operate and which combine added user value with quick return on investment and sustainable revenue potential. In the coming years, more and more Asian enterprises will recognize the benefits of subscribing to these new Layer 2 services.