Reporting in from Light Reading’s Ethernet Europe

[This article originally appeared in Carrier Ethernet News]

The who’s who of Carrier Ethernet Europe gathered last week in Munich for the annual Light Reading Ethernet Europe.  Collocated with the MEF’s quarterly members’ meeting, this year’s event lived up to its billing as the premier Carrier Ethernet event in EMEA.

My schedule only allowed for a couple of brief visits into town which naturally included the requisite visit to the legendary Hofbrauhaus, for a few um-pa-pa’s, a very large stein of beer and some rockin’ pretzels.   

But the real highlight of the week was Carrier Ethernet.  In this post, I’ll recap a few highlights from the event.

Hosted by Stan “EtherMan” Hubbard, senior analyst with Heavy Reading, the themes of the event were Ethernet-enabled cloud services, Ethernet wholesale interconnection and end-to-end service management.  The latter two are key elements of the MEF’s recently designated Carrier Ethernet 2.0 (CE2.0). 

Hubbard shared one chart from his “state-of-the-industry” survey with the Ethernet Executive Council where he described the service provider sentiment that “price erosion and commoditization” are the top factors having a negative impact on Ethernet service revenues and profitability.  Interestingly, out of all the services he asked about in his survey, TDM leased lines were experiencing nearly zero price erosion. I guess that is further evidence that old networks and services never seem to go away as quickly as you might imagine.

Nan Chen, president of the MEF, opened up the event with his keynote, introducing the audience to CE2.0 and announcing that the MEF would launch its CE2.0 certification program on April 30. 

Most operators agreed that an SLA reporting portal is a key element of today’s service offerings, but their views differed slightly on whether they could make money on it.  Henry Bohannon, head of Ethernet and IP Services Product Management at COLT, for example, does not believe he can charge customers for portal by itself, but he can demand a premium for a low-latency service – which in turn, requires the portal to prove he is hitting his latency commitments. PWWC Global’s AVP of Business Integration, Shahar Steiff, sees value in a two-tier model, whereby the customer gets some basic performance monitoring portal at no charge.  Advanced reporting functionality, however, can command an additional fee.  Nodding in agreement, Jørn Martin Suen Slåtten, marketing manager of Broadnet Norway referred to performance monitoring as the “glue to the customer.”

Multiple Classes of Service – a key CE2.0 feature, seemed to get the cold shoulder from several of the service provider representatives, including COLT’s Bohannon and Craig Waldrop, Senior Product Manager at Equinix.  Both speakers spoke of the added complexity involved and the lack of business case supporting fancy CoS schemes at this time. This struck me as being in sharp contrast with the mood of a number of US-based service providers that have been offering CoS for many years.  Perhaps with the increased global interconnectedness of Ethernet we will soon see more widespread introduction of CoS based services.

Chris Eldredge, president and GM Ethernet exchange & product management, TELX said on at least two occasions that he was surprised to find he is seeing a new trend in the Ethernet Exchange business: the customers are not so much carrier to carrier, but enterprises that are moving into the exchanges to gain a connectivity and latency advantage. This is particularly true of the financial services sector and others who are moving substantial assets into the cloud. 

Speaking of the cloud – I would be remiss if I didn’t highlight the session entitled “Building Virtualized, On-Demand Cloud Networks.”  Overture’s CEO, Jeff Reedy, outlined the case for ubiquitous access to the cloud with easy service management. The section that grabbed the most attention, however, was after he described the five essential characteristics of the cloud - as defined by the US NIST:  on-demand self-service, broad network access, resource pooling, rapid elasticity and measured service. Reedy wrapped up leaving the audience hanging onto the notion that the edge of the network might soon begin to take on a number of the “virtual” attributes we have come to associate with the cloud. This “virtual service edge,” as he called it, will usher in a new era of possibilities for Carrier Ethernet.

Finally, the one quote that seemed to get Heavy Reading’s Senior Analyst Patrick Donegan excited came from Markus Lautenschlager, product manager at Deutsche Telekom:  “in the future Ethernet might be replaced by another technology”

Photos from the event