Public network implications of enterprise network convergence to IP over Ethernet LANs

1. Public network implications of enterprise network convergence to IP over Ethernet LANs Antti Kankkunen CTO, Tellabs International

2. Agenda • Motivation behind the convergence towards IP over Ethernet architecture • Other drivers for public network infrastructure development • The need for MPLS • Next generation services with Ethernet service interfaces and IP based control plane - MPLS VPNs • Ethernet over SDH - optimal access solution for MPLS VPNs • Profitable convergence towards optimized network architecture • Conclusions

3. Motivation behind the convergence towards IP over Ethernet architecture • Growth of Internet has made IP the protocol of choice at network layer. • Ethernet is the lowest cost high speed interface type available. • Ethernet is the “most interoperable” communications interface globally. • Ethernet is the easiest networking technology to install. • Ethernet supports any bitrate. • Fast Ethernet is the interface for flexible bit rates of up to 100Mbit/s and Gigabit Ethernet is the interface for flexible bit rates of up to 1Gbit/s. IP over Ethernet architecture dominates Enterprise LANs

4. Other drivers for public network infrastructure development Business Data Retail Service Revenue by Type ETSI Markets Capture part of the legacy revenues with IP/MPLS infrastructure. Save OPEX and CAPEX due to reduced investment to new ATM/FR infrastructure. Source: Gartner June 02 Internet traffic growth forces investments to IP infrastructure. Profitability of this investment can be improved by tapping the ATM, FR and LL revenues.

5. The need for MPLS • Ethernet has become the most cost efficient service interface towards the end user. • The growth of the Internet is making IP infrastructure an attractive platform for all connectivity services. • Business connectivity requires QoS, predictability and reliability that can only be delivered with connection oriented networks. • Traditional IP networks are not suitable for full service production. • IP/MPLS network can simultaneously produce both best effort Internet service and connectivity services with strict QoS and availability guarantees. IP/MPLS based services can combine Ethernet service interfaces with QoS, reliability and predictability of legacy LL, ATM and FR offerings.

6. Next generation services with Ethernet service interfaces and IP based control plane - MPLS VPNs Next generation services with Ethernet service interfaces and IP based control plane - MPLS VPNs IP/MPLS Based Connectivity Service – Layer 3 VPN IP Router = SPNetwork Ethernet Ethernet IP/MPLS Based Connectivity Service – Layer 2 VPN Ethernet Switch = SPNetwork Providing native IP and Ethernet based services with Ethernet service interfaces leads to best price performance ratio. May 29, 2003 6 The Arab Telecom and Internet Forum 2003 IP/MPLS Based Connectivity Service – Layer 3 VPN IP Router = SPNetwork Ethernet Ethernet IP/MPLS Based Connectivity Service – Layer 2 VPN Ethernet Switch = SPNetwork

7. Profitable convergence towards optimized network architecture LAN-IC = Local Area Network Interconnection ICT = Information and Communications Technology VAS = Value Added Services ? Storage LAN-IC Internet ICT VAS VoiceBasic+VAS End userneeds ? BandwidthWholesale Storage Area Network BandwidthWholesale LeasedLines LeasedLines LeasedLines ATM/FR SwitchedData ATM/FR SwitchedData ATM/FR SwitchedData Internet +ICT VAS +MPLS VPN Internet +ICT VAS +MPLS VPN Fixed &MobileVoice Fixed &MobileVoice Fixed &MobileVoice Services IP/MPLS IP/MPLS TDMVoice TDMVoice TDMVoice ATM ATM ATM FR FR FR Networks SDH / DWDM / Dark Fiber May 29, 2003 7 The Arab Telecom and Internet Forum 2003 Profitable convergence towards optimized network architecture LAN-IC = Local Area Network Interconnection ICT = Information and Communications Technology VAS = Value Added Services LAN-IC Internet ICT VAS VoiceBasic+VAS End userneeds Services Networks SDH / DWDM / Dark Fiber

8. SDH Based N*2M Access solution for MPLS VPNs Backbone Access Regional CPE LAN 10/100 Ethernet Nx2M STM-64 10GE GE STM-16 STM-16 IP Connectivity Multiple VC-12-nv switched to GE Eth. mapped to VC-12-nv Transport STM-64/ xWDM STM-1 STM-16 4/1DXC STM-1ADM 4/1DXC 4/4DXC 4/4DXC DWDMOADM Transit Exchange /Regional Network Transit Exchange / Backbone Network CustomerLocation Local Exchange Ethernet over SDH provides and optimal access solution for MPLS based VPNs.

9. Conclusions • Enterprise networks are converging towards IP over Ethernet architecture. • The constant growth of Internet traffic requires investments in IP infrastructure. • MPLS brings support for QoS and traffic protection to IP infrastructure enabling convergence of LAN-IC traffic and eventually even voice traffic to a single infrastructure. • Single infrastructure for multiple services saves OPEX and CAPEX. • MPLS infrastructure can support traffic growth of legacy switched data (ATM/FR) services. • Ethernet over SDH is an optimal access mechanisms for MPLS VPNs. • Securing long term profitability requires service providers to move up in the value chain towards managed services and value added services. • MPLS based L3 VPNs are a good platform for value added service production. MPLS based L2/L3 VPNs are the optimal public network services for serving end user networks based on IP over Ethernet architecture.