Fiber to the Desk Where Is It Cost-Effective Today? Eric R. Pearson, CPC, CFOS President, Pearson Technologies, Inc. TIA Fiber Optics LAN Section Copyright

Fiber to the DeskWhere Is It Cost-Effective Today?

Eric R. Pearson, CPC, CFOSPresident, Pearson Technologies, Inc.

TIA Fiber Optics LAN Section

Copyright © 2003, Telecommunications Industry Association.

2Copyright 2003, Telecommunications Industry Association.

AgendaFiber to the Desk, Where Is It Cost-Effective Today?

Expanded TIA Fiber Optics LAN Section scope

Cabling market review & forecast

Comparing fiber installed first costs with copper


TIA Fiber Optics LAN SectionBackground and Mission

Formed in 1993 as part of TIA’s Fiber Optics Division

Members include: 3M, ADC, Berk-Tek, CommScope, Corning,

Fluke Networks, Leviton Voice & Data, OFS, Optek

Technology, Ortronics, Pearson Technologies, Panduit,

Sumitomo Electric Lightwave, Transition Networks, Tyco/AMP

Electronics

Original mission: To create a resource where people can learn

about the technical advantages and affordability that optical

transmission brings to customer-owned networks


Expanded FocusResult of Target Audience & Member Input

Fiber-based LANsStorage area networksData centersIndustrial applicationsBuilding automation systemsFiber in security systems

Fiber in the home


TIA Fiber Optics LAN SectionMany Resources Available

WebcastsTrade press articlesWhite papersPress releasesEditor briefingsStimulate complementary

standards development Interoperability

demonstrations

Presentations at industry conferences

Enterprise fiber case histories Equipment directories

www.fols.org


Market TrendsCopper and Fiber Cable Shipment Forecast*

Late 90’s: double digit enterprise cabling growth due to UTP LAN installations in large enterprises

2001-2002: 20% declines in enterprise cabling market

2003: Flat market with slow recovery late in year

2003-2008 Single digit growth for UTP Double digit growth for fiber

*Source: “US Building Fiber & Copper Cabling Systems” FTM Consulting, February 2003

Total Cabling System Forecast $(B)

3.8 3.5 3.64

4.65

5.7

0

1

2

3

4

5

6

$B

illi

on


Fiber-Copper Cable Shipments

Cable Product Value Shipments

2004-2007:– Major shift to fiber cable

Major fiber applications– Gigabit Ethernet– Fiber to the zone– Fiber to the desk– Storage area networks

2001-2003– Copper cable still dominant– Declining market– Declining copper cable prices

Source: FTM Consulting


Selecting the Horizontal MediaUTP Copper or Multimode Fiber?

UTP Copper Perceived lowest system cost

The “easy” choice

Almost “universal” installer familiarity

Smooth Ethernet upgrade path

More complex to install & test

Susceptible to EMI, RFI & crosstalk

Limited cable pull strength

100 meter maximum @ 1 Gbps

Shorter useful life

Multimode fiber Higher bandwidth

Simplified installation

Significantly reduced testing costs

Lower life-cycle infrastructure costs

Smooth Ethernet upgrade path

Immunity to EMI, RFI & crosstalk

Superior cable pull strength

Reduced initial installed costs with centralized architecture

Perception of complexity

Less installer familiarity

High priced electronics


So, Why Not More Fiber?Are Costs Really Higher?

Perception: fiber is still more expensive than copper Erroneous assumption: fiber networks should be

designed exactly like copper networks Reality: fiber electronic capabilities allow the network cost

to be reduced in many applications-by tens of thousands of dollars. In these applications, UTP is too expensive to justify!

Reality: network lifecycle costs not the primary driver


Comparing Fiber - Copper CostsSeveral Comprehensive Studies

Tolly Group, August 2000 Migrating to Fiber-The Case for Centralized LAN Cabling Still available for download #200505 http://www.tolly.com/UTS/UTS_home.aspx (page 8)

TIA/EIA-568 B issued Revision B includes the collapsed backbone, or FTTD network

TIA Fiber Optics LAN Section, November 2001 First generation cost model Very popular download from FOLS website

TIA Fiber Optics LAN Section, July 2003 Second generation cost model Available for download as of September 19: www.fols.org Also visit Pearson Technologies web site: www.ptnowire.com


Second Generation Cost ModelsSignificant Market Changes

Decreased UTP component prices Decreased Fiber cable and connector prices Decreased Fiber transceiver prices

Long wavelength (1300 nm) decreases substantial Short wavelength (850 nm) also decreased

Decreased overall network costs UTP-fiber All fiber


TELECOMMUNICATIONSROOM

HORIZONTAL

WORK AREA

IO

PATCHCORD

HOME RUNS

HOME RUNS

EQUIPMENT ROOM

HIGH

COUNT

RISERS

ACTIVEEQUIPMENTSINGLE POINT

CROSS CONNECTPATCHCORDS PATCH

CORDS

PCOUTLETSPLICE OR

INTERCONNECT

Electronics

ElectronicsElectronics

No electronics

Centralized Fiber ArchitectureDesigned for fiber (300 meters))

Standardized in TIA/EIA-568-B.1 & ISO-11801, 2nd Edition


Cabling System ArchitecturesHierarchical Star, Optimized for UTP Copper (100

Meter Limit)

HORIZONTALCROSS CONNECT


HORIZONTAL

WORK AREAPATCHCORD

EQUIPMENT ROOMACTIVEEQUIPMENT

PATCHCORDS PATCH

CORDS

MAINCROSS CONNECT

RISERS

HIGH

COUNT

LOW

COUNT

RISERS

PATCHCORDS

ACTIVE EQUIPMENT

PCOUTLET

Electronics

Electronics

Electronics


Installed First Costs Model AssumptionsHierarchical Star UTP vs. Centralized Fiber

Building model 8 story, 48 ports/floor Costs calculated on “per port” basis Port utilization

• Copper: 70%• Fiber: 90%

Horizontal subsystem UTP: Cat 5e or Cat 6 UTP Fiber: 62.5 or 50 µm multimode fiber

Riser subsystem Fiber used in riser subsystem (both models)


Comparing Installed First CostsAdditional Assumptions

Loaded labor rate $60.00/hour [median value]

Telecom room construction costs $150.00/ft2 [median value]

5 year power costs Lighting, heating & cooling Does not apply to centralized fiber network Estimated at $450 for 5 years

Cost models completely interactive


Telecommunications Room CostsSignificantly Less Expensive With Fiber

UTP/Fiber All Fiber

UPS $1,000 Not required

Temperature control

$10,000 Not required

Telecom room size

6’x10’ 6’x5’

Telecom room cost

$9,000 $4,500

Total cost $20,000 $4,500

Equipment to heat and cool electronics is costly.


Key Point

Model has a major bias against fiber ($93.75/port)!

Twelve out of twelve scenarios had the same result

Initial installed fiber cost lower than initial installed UTP/fiber cost

Significance: fiber is cost effective in many scenarios;

Network planners should calculate their fiber network cost with the model to find opportunity for cost reduction


Multiple Scenarios ExaminedSecond Generation Cost Models

1. SG, list price

2. SG, 80% of list price

3. K-12

4. Fiber to the zone

5. Tier II electronics, street

6. Tier I electronics, mixed

price sources

7. Tier I electronics, reduced

cost switch

8. Cat 6 Tier I cable

9. Cat 6 Tier II cable

10. Low cost solution

11. 100BASE-SX, list price

12. 100BASE-SX, street price


Cost Summary, SG at List Price Scenario 1

SG is the Generic name for Volition, or VF-45 connector and electronic fiber system

SG components have one of lowest fiber costs

With SG at list price, the fiber network saves

$16,037.10

$41.79 /port

6.2%


SG at List Price : Details

SGList Price

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber

Desktop to telecom room

$216.10 $151.04 $25.03 $35.00

Fiber in & to telecom room

0.90 8.40 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 8.47 328.06 0.46 20.00

Total cost per port

678.04 636.25


SG at Street Price Scenario 2

Assumes 80% of list price

With SG at street price fiber network saves: $38,970.43

$101.51 /port

15%


SG At Street Price: Details

SG80% of List

Price

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


$216.10 $151.04 $25.03 $35.00


0.90 8.40 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 8.47 268.34 0.46 20.00

Total cost per port

678.04 576.53


Tier II Switch, Street Price Scenario 5

Tier II switch at street price Tier II switch is not from dominant manufacturer

Fiber network saves $48,290.59

$125.77 /port

20%


Tier II Switch, Street Price: Details

Tier II Electronics Street Price

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


163.83 182.43 25.03 35.00


0.90 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 13.21 159.43 0.46 20.00

Total cost per port

630.51 504.74


Tier I Switch Plus Other Electronics Scenario 6

Switch is from a dominant manufacturer

Electronics are from various sources

Fiber network saves

$52,026.13

$135.49 /port

21%


Tier I Switch Plus Other Electronics: Details

Tier IElectronics, Mixed PriceSources

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


180.58 182.43 25.03 35.00


0.90 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 17.85 171.10 0.46 20.00

Total cost per port

651.90 516.41


Tier I Switch And Reduced Cost GbE Switch

Scenario 7

Same switch as the previous scenario

Reduced price GbE switch

Fiber network saves

$47,968.88

$124.93 /port

19%


Tier I Switch And Reduced Cost GbE Switch

Cisco 2950 with Reduced Cost GbE Switch

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


180.58 182.43 25.03 35.00


0.90 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 7.29 171.10 0.46 20.00

Total cost per port

641.34 516.41


Tier I Switch, Cat. 6 UTP Scenario 8

Based on Scenario #7

Uses Category 6 UPT cable Tier I switch in the TR

Fiber network saves

$72,824.72

$189.65/port

27%


Tier I Switch, Cat. 6 UTP: Details

Cat 6 Tier I Cable

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


239.49 182.43 25.03 35.00


0.79 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 13.21 171.10 0.46 20.00

Total cost per port

706.06 516.41


Low Cost, Tier II Switch with Cat. 6 UTP

Scenario 9

Based on Scenario #7

Uses lower cost switch in TR and Cat. 6 Cable

Fiber network saves

$70,548.72

$183.73 /port

26%


Low Cost, Tier II Switch With Cat. 6 UTP: Details

Cat 6Reduced Cost Configuration

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


239.49 182.43 25.03 35.00


0.79 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 7.29 171.10 0.46 20.00

Total cost per port

700.14 516.41


Lowest Cost UTP Network Scenario 10

Switch and electronics chosen for low cost

Fiber network saves

$7,615.53

$19.85/port

3%


Lowest Cost UTP Network: Details

Low Cost Solution

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


145.75 182.43 25.03 35.00


0.79 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 7.29 241.24 0.46 20.00

Total cost per port

606.40 586.55



WORK AREAPATCHCORDS

HOME RUNS

HOME RUNS

EQUIPMENT ROOM

Low

COUNT

RISERS

ACTIVEEQUIPMENTSINGLE POINT

CROSS CONNECTPATCHCORDS PATCH

CORDS

PCSPLICE OR

INTERCONNECT

Electronics

No electronics

Extended Backbone

Extended Backbone

Electronics

Will be standardized in TIA/EIA-568-B.1& TIA/EIA-569-B

Zone Cabling ArchitectureExpanding Backbone Bandwidth While Integrating Copper Components

Electronics

ACTIVEEQUIPMENT

ACTIVEEQUIPMENT

PATCHCORDS

OUTLETS

OUTLETS


HC in the TR

Cubicles Offices

Fiber Backbone

Zone Cabling with Telecomm Enclosure

LEGEND:

= Telecommunications = Telecommunications Outlet/ConnectorOutlet/Connector

= Telecomm Enclosure with a switch

= Building Pathways and Spaces

= Horizontal Cross-Connect

= Telecommunications RoomTR

= Fiber Backbone Cable= Horizontal Cable

HC


Zone (“Tiny TR”) Telecom EnclosureStandards Update

TIA TR-42.3 Defines telecom enclosure Out for default ballot To be included in 569-B

TIA TR-42.1 Defines cabling

implementation Balloted in July To be addendum to 568-B.1

Both standards expected by February 2004


FTTZ, Tier I Switch Scenario 4

Tier I UTP Switch

SG fiber switch with 100 Mbps uplink

Fiber network saves

$170,173.25

$443.18/port

65%


FTTZ, Tier I Switch: DetailsFiber to the Zone

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


216.10 54.38 25.03 35.00


0.79 1.05 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 8.47 30.57 0.46 20.00

Total cost per port

677.93 234.75


K-12 FTTZ Scenario 3

Like previous scenario but technician cost of $78/node added to UTP cost [1 hr/wk; 5 yrs; $30k/yr]

Fiber network saves

$200,173.25

$521.31/port

69%


K-12 FTTZ: DetailsK-12 Materials/

Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


$216.10 $54.38 $25.03 $35.00


0.79 1.05 0.41 0.00

Support costs 504.17 93.75 0.63 0.00

Equipment room 8.47 30.57 0.46 20.00

Total cost per port

756.06 234.75


Reducing Fiber LAN Electronics CostsTIA/EIA-785 Standard Ratified, May 2001

Low cost, 850 nm LED-based optics

300 meter support

Designed for 62.5 or 50 m multimode fiber

10/100 auto-negotiation support

Parallel detection for interoperability with installed base of 10BASE-FL devices

Not intended to replace or be compatible with 100BASE-FX optoelectronics

Addendum #1 expected to lower costs furtherAddendum #1

Released 12-23-02


Media converters Install new fiber infrastructure Use legacy electronics until end of useful life Incrementally upgrade to fiber as required Convert point-to-point links and workstations-to-hubs/switches

NIC cards Conversion to fiber at the PC New PC card products available

100BASE-SXWall Outlet

Media Converter

100BASE-SX ElectronicsFirst Dual-Speed Fiber Ethernet

100BASE-SXFiber PC Card

(PCMCIA)


100BASE-SX, List Price Scenario 11

Compares the cost of 100BASE-SX electronics to Cat. 6 UTP. Assumes volume pricing.

Fiber network saves:

$41,844.61

$108.98 /port

15%


100BASE-SX, List Price: Details

100BASE-SXList Price

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


239.49 202.43 25.03 35.00


0.79 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 13.21 231.77 0.46 20.00

Total cost per port

706.06 597.08


100BASE-SX, 90 % List Price Scenario 12

Based on previous scenario with 10% discount on 100BASE-SX electronics

Fiber network saves

$52,318.28

$136.25 /port

19%


100BaseSx, 90 % List Price: Details

100BASE-SXStreet Price

Materials/Node($)

UTP/fiber All fiber

Labor($)

UTP/fiber All fiber


239.49 190.43 25.03 35.00


0.79 14.13 0.41 0.00

Support costs 426.04 93.75 0.63 0.00

Equipment room 13.21 216.50 0.46 20.00

Total cost per port

706.06 569.81


Cost Analysis Summary, Part 1Where Fiber Makes Sense Today

Scenario UTP/fiber

All FiberFiber $ premium/savings

Fiber % premium/savings

(1) SG at list price $678.04 $636.25 $41.79 6%

(2) SG at 80% list price

$678.04 $576.53 $101.51 15%

(3) K-12 $756.06 $234.75 $521.31 69%

(4) Fiber to the zone $677.93 $234.75 $443.18 65%

(5) Tier II electronics, street

$630.51 $504.74 $125.77 20%

(6) Tier I electronics mixed price sources

$651.90 $516.41 $135.49 21%

(7) Tier I electronics reduced cost switch

$641.34 $516.41 $124.93 19%


Cost Analysis Summary, Part 2Where Fiber Makes Sense Today

Scenario UTP/fiber

All FiberFiber $ premium/savings

Fiber % premium/savings

(8) Cat 6 Tier I cable $706.06 $516.41 $189.65 27%

(9) Cat 6, Tier II cable $700.14 $516.41 $183.73 26%

(10) Low cost solution $606.40 $586.55 $19.85 3%

(11) 100BASE-SX at list price

$706.06 $597.08 $108.98 15%

(12) 100BASE-SX at street price

$706.06 $569.81 $136.25 19%

Fiber less than copper in every scenario examined.

Average fiber savings: $177.70/port (26%)


Second generation cost model sample screen


Download from www.fols.org & input your own numbers

Developed by Pearson Technologies and the TIA Fiber Optics LAN Section


Georgia Public Broadcasting

Berne University (Switzerland)

Tullahoma, TN City Schools

Simon & Schuster

American Museum of Natural History

DreamWorks Studios

NASA Goddard Space Flight Center

George Washington University

Binghamton University

Smith Barney

New York City Public Schools (199)

The Gleason Works

J. Paul Getty Center

Siemens ICN

Ohio Board of Regents

Bally’s Las Vegas

Metropolitan Nashville Public

Schools

U.S.A.F. Research Laboratory,

Wright Patterson Air Force Base

Hilton Hawaiian Village* Various published sources

Centralized Fiber Cabling Installations

Recent Installations

Fiber to the DeskWhere Is It Cost-Effective Today?

Most New Buildings,Most Retrofits of Older Buildings

Schools [FTTZ]Fiber-To-The-Zone

Copyright © 2003, Telecommunications Industry Association.


Acknowledgement

Mr. John Struhar, Chairman of the FOLS, developed this presentation with input from members of the FOLS.


Thank you for your attention.

www.fols.org

Documents

Fiber to the Desk Where Is It Cost-Effective Today? Eric R. Pearson, CPC, CFOS President, Pearson Technologies, Inc. TIA Fiber Optics LAN Section Copyright