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MarketImpacMay,2

Volume4,2

PACKETOPTICALTRANSPORTSYSTEMS:PAVING

THEWAYTOALLIPINFRASTRUCTURE

Carriers are under intense cost pressures, and to maintain profitability they must

introducenewservicestoreplacedecliningrevenues fromtheircurrent legacyservices.

MostofthesenewIPservicesarerichinmedia,sensitivetothequalityofnetworkissues,

and extremely bandwidth hungry. In addition to pricing pressures, providers are also

competingintenselyforcustomersdemandingthesehighbandwidthservices.

To achieve service quality and deliver services to remain competitive in this market,

carriersmustevolvefromatraditionalTDMbasedcircuitswitchednetworktoonethatis

predominantly packet centric. As a consequence of this evolution, providers are

demanding

products

to

support

and

facilitate

this

migration.

Fueled

by

the

Verizon

RFP

to

optimizetransportsystems, itbecamequicklyapparentthatthe industryneededa fully

integrated product that supported optical transmission, TDM, and packet services.

Becauseproviderswerealreadyplanning tomigrate theirnetworks,companiessuchas

British Telecom and Telecom Italia indicated interest in providing IP services over a

converged product. The outcome of the industrys interestwas the development of a

network model that supports TDM and Ethernet and runs on an optical transport

platform.ThisconvergedplatformisnowwidelyreferredtoasaPacketOpticalTransport

System(POTS),asubsetoftheMetroWDMsegment.

Optic

Topic: PacketOpticalTransportSystem

KeyTakeaways Worldwide,theMetroWDMmarket i

the fastest growing segment in th

Optical Networking market, and ACG

believesthismarketwillreachover$

billiondollarsby2012.

With the rapid decline of thSONET/SDHmarket (over 30% declin

the last two years in SONET/SDH

equipment), TDM traffic, in genera

willdrop

off

over

the

next

5to

10

year

aspackettrafficincreases.

An architecture that canmaintain thkey benefits of a TDM network (low

latencyandjitter)andalsosupportth

new Ethernet and IP services i

emerging allIP networks will provid

themostefficient solutionat thebes

costpointsforproviders.

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PACKETOPTICALTRANSPORTSYSTEMS:PAVING

THEWAYTOALLIPINFRASTRUCTURE

Some start asWDM products and

offer Ethernet interfaces bu

provide little or no TDM suppor

for legacy traffic. Others have

evolved from the MSPP market

traditionally TDM based, wit

Ethernet features. In some cases

theROADM has yet to be offere

oris

not

market

ready.

Because

th

industryhasyettofullydefinethi

market,vendorshaveawideope

field in which to differentiate th

featuresthattheywilldeploy.

Thekeytosuccessinthismarketi

thatallthreetechnologiesmustb

supported,andtheymust functio

withoutpacketlossorperformanc

issues.Thisrequiresaproducttha

is

well

thought

out

in

th

developmentstage.

The vision of a converge

multiservice optical platform ha

gained broad recognition in th

telecom industry.CreatingaPOT

product requires architectura

agility and expertise in transpor

design. It also require

understanding the benefits TDM

hashad

in

networks

to

date,

a

well as the flexibility and

opportunity packet switchin

bringstotheproduct.

Interworking between the TDM

and packet domains is extremel

important ifvendorsaretodelive

onthepromiseofafullyconverge

network that integrates legac

TDM serviceswithnativeEtherne

andMPLSswitching.

Worldwide,theMetroWDMmarket isthe

fastest growing segment in the Optical

Networking market. The POTS market,

which isalreadya severalhundredmillion

dollarmarket,

is

currently

asmall

subset

of

theMetroWDMmarket.Butwith intense

interest and the need to deploy

multiservice migration platforms, ACG

believes this market will reach over two

billiondollarsby2012.

BEHINDTHEMARKETTransport networks, which are packet

aware, are simply more efficient and can

leverage

the

statistical

multiplexing

capabilities widely used in packet

networks. Integrating packet technology

into transport equipment clearly benefits

service providers by lowering their capital

expendituresandoperationalcostsaswell

asprovidingnewrevenueopportunities.

Today,TDMcircuitscarryEthernetor IP in

an opaque environment, usually by

mappingEthernet intoSONET/SDHframes.

Most

(if

not

all)

of

the

Ethernet

transported

today ispackagedintoSONET/SDHframes.

Ethernet traffic is expected to grow

dramatically, and better bandwidth

utilization and service delivery can be

deployed if packetaware switching is

added to transport equipment. With the

rapid decline of the SONET/SDH market

(over 30% decline the last two years in

SONET/SDH equipment), TDM traffic, in

general,willdropoffoverthenext5to10

yearsas

packet

traffic

increases.

WhatisaPOTSproduct?Ideally,POTSisa

transport product that includes a WDM

portion called a reconfigurable add drop

module (ROADM);aTDM interface,which

canmultiplexandgroomtheTDMtraffic(it

could be an MSPP on a blade); and an

Ethernetswitching interface,allsupported

in the same chassis. A POTS product

should support endtoend differentiated

services with statistical multiplexing and

highqualitytraditionalservices,runningon

top of a flexible optical mesh. It may or

may not support connectionoriented

Ethernetbutwillmostlikelyberequiredto

supportOTN

and

OAM

capabilities.

The goal is to provide costeffective

Ethernet transport. To do that, the

transport equipment must evolve to

support native Ethernet and ultimately

MPLS but still provide the TDM

functionality prevalent in many networks.

For Ethernet to ultimately replace TDM

traffic, OAM functionality, protection and

synchronization will all be required. Once

allthese

features

are

supported,

it

will

allow Ethernet to ultimately replace TDM

traffic; however, this migration will be a

very long transition. Service providers are

looking to vendors to help them through

thismigrationperiod.Anarchitecture that

can maintain the key benefits of a TDM

network (low latency andjitter) and also

supportthenewEthernetandIPservicesin

emerging all IP networks will provide the

most efficient solution at the best cost

pointsfor

service

providers.

However,themigrationfromcurrentsingle

solution networks to the converged allIP

"utopia" isnot foreverycarrierrightnow.

Individual sites, networks, and companies

havediffering requirementsandpreferred

migration plans, which can be fixed or

mobilenetworks.Becauseeachnetwork is

unique,vendorsmustunderstand that the

migration strategy must be tailored and

adjustedfor

every

provider.

If

avendor

offers a "professional service" to help the

service provider perform this migration,

thevendor ismore likely tobechosen for

thenetworkdeployment.

THELOWDOWNThereareseveralapproachesvendorshave

taken to offer a POTS product. Usually,

they revolve aroundwhat the vendor has

donebestordevelopedinthepast.

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THEFUTUREService providers need to look for

vendors that offer several options to

address their specific challenges, for

example, provisioning of endtoend

servicesbetweenthePOTSproductand

CESR (Carrier Ethernet switching and

routing) platforms is a feature that also

assists service providers in migrating

networks. But migration must also

include new benefits and features such

as increased scalability, granular quality

of service, simplicity of provisioning, in

service software upgrades, and lower

costpoints.Vendorsmustofferacarrier

class solution that combines next

generationSONET/SDH,Layer2Ethernet

switchingandWDM/OTNROADMallina

single,efficientplatform.Withcomplete

OTN compliance, the result is protocol

transparencyand interoperabilityon the

opticallayer.

RayMota

ManagingPartner

www.acgresearch.net

+408.200.0967

Copyright2010ACG.Reproduction isprohibited

unlessauthorized.Allrightsreserved.