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NFOEC '99: Traditional Vendors Re-calibrate Optical Metro
Network Strategies
9/30/99 By: Erik Kreifeldt
CHICAGO, September 29—One of the big stories at NFOEC '99 is the attempt
by so many old and new companies to break into the metro optical transport
market with new equipment platforms. Some 30 companies are vying for the
space, from traditional vendors to start-ups, pitching both new-and-improved
conventional technology and entirely new transmission schemes.
While good ideas are plentiful, adoption of new technology has been surprisingly
slow, and nobody knows what solution will take off in the marketplace. Despite
the decreasing effectiveness of synchronous optical network add/drop
multiplexers (SONET ADMs) that dominate metro networks, carriers have yet to
embrace a new generation of optical transport platforms designed to handle new
traffic trends better than SONET.
With a strong SONET legacy, metro DWDM technology, capacity to manufacture
products and the experience to support customers, traditional telecom vendors
such as Alcatel, Lucent, and Nortel are well-positioned to supply whatever metro
optical network solution carriers need. These behemoth vendors can always
acquire start-up companies that bring promising innovations to the party—start-up
companies that are hard-pressed to execute successful manufacturing,
operations, support, and sales strategies into the stodgy telecom space on their
own.
Three classes of metro optical transport stories circulate around the show,
surmises Lucent's Kathy Szelag, a VICE PRESIDENT for the optical networking
group. One story chronicles all the needs carriers could want in one expensive,
high-performance system. Another story speaks of systems more modest in
scope and price, primarily supporting only unamplified, point-to-point
architectures. The third is the sexy story from start-up companies that are difficult
to evaluate without products available to test.
Wherefore optical transport
The reason carriers need a new metro optical transport strategy is the gulf
between enterprise network capacity and connectivity capacity between
enterprises and public network points of presence, explains Nortel Networks'
Brian McFadden, a vice president for the optical networks group. "We believe 10
gigabit Ethernet will become a standard to connect [data facilities]," he says. "I
fully expect to see Gigabit Ethernet to the house in the next five years."
Meanwhile, metro access rings are plugging along with OC-3 and OC-12 SONET
ADMs that serve carriers well, but do not scale well to handle increasing data
traffic. "We've got to figure out a way to make that connectivity go further,"
McFadden says. "Clearly, we feel there will be a mix of traditional SONET,
second-generation SONET, and pure optical approaches."
A pure optical approach must prove in at data rates below an OC-12 (622 Mb/s),
McFadden adds. Nary one year ago at NFOEC '98, He noted that metro DWDM
systems must prove in below OC-48 (2.5 Gb/s). One way to accomplish this is to
multiplex signals in the optical domain. "If you aggregate enough services onto
higher bit rate signals, it's more cost effective to transport," he says. "It's proven
in for the long haul."
To prove in a next-generation metro optical transport architecture, new transport
systems must enable an order of magnitude reduction in cost per bit transported,
McFadden says. This is in line with what Nortel estimates to be a 99% reduction
in the cost to transport a bit coast-to-coast over a long-haul network over the last
five years or so. Metro transport cost has only gone down 50% in that time, he
says.
So how does an equipment manufacture deliver next-generation transport
capability that costs ten times less than current techniques? Nortel is so far
playing the answer close to the chest. "There are ways to do that on existing
platforms and extensions of them," McFadden says.
Different problems
Unlike Nortel, rivals Lucent and Alcatel are revealing more over their optical metro
transport hands. Both have shifted their strategy from building metro dense
wavelength division multiplexing systems that satisfy every imaginable network
configuration to offering systems more modest in scope—and price.
"Not all metro product needs are the same," says Kathy Szelag, a VICE
PRESIDENT for the optical networking group. She adds that the market is still
immature, which yields uncertainty about which metro transport architecture will
prove most useful.
The scaled-down systems cost half as much as their predecessors. "If something
half the price doesn't accelerate the market, something is definitely wrong,"
Szelag says.
Alcatel's Darryl Chaires acknowledges the elusive metro market. "In the
request-for-quotes that we've seen, customers define "metro" differently," he
says. "If you design one equipment platform for all of them, you can't hit the
market [price points]."
To address disparate customer needs, Alcatel designed a metro access version
of its metro DWDM system that costs approximately $20,000 per wavelength, vs.
$40,000 per wavelength for a full-featured interoffice transport platform.
Multiple platforms
While Alcatel is offering two metro DWDM platforms—one for interoffice transport
and one for access rings—Lucent is trying to ensure that it plays in the metro
transport space by offering three different products. Like Alcatel found, trying to
apply one platform to many scenarios proved too expensive for carriers, Szelag
admits.
Positioned as the "Cadillac of metro DWDM systems," Lucent's AllMetro OLS
was introduced in January as the provider of all optical metro network needs. It
scales from four to 40 wavelengths and operates in ring or mesh architecture. It
serves a wide area with amplifiers, and sports a programmable add/drop option.
But AllMetro doesn't serve enterprises well. "It's still a great machine, and we
think it has better features than our competitors', but for CLECs [competitive local
exchange carriers] and data enterprises, it's just too expensive," Szelag says.
To better serve economies of small scale, Lucent launched the MetroPoint, a
16-channel DWDM system that handles 10 Gb/s, 2.5 Gb/s, and Gigabit Ethernet
signals. All though the system uses the same DWDM filters as the AllMetro, the
point-to-point, unamplified MetroPoint makes a strong economic case for CLECs
and Internet service providers that want to interconnect Internet protocol (IP)
equipment, but do not need to carry SONET.
Finally, Lucent plans to launch a coarse WDM system at OFC 2000 in March.
The system will use the same WDM filters as the other systems, but the
channels will be spaced nearly 100 nm apart. The wide spacing requires less
expensive lasers transmitters than do narrowly spaced wavelengths.
The MetroPoint costs 50% less than the AllMetro, and the coarse WDM system
will cost 50% less than the MetroPoint, Szelag reports. While potential
customers see the long-term benefit of high-end metro DWDM, Szelag says they
balk at the start-up cost of the AllMetro. Given the choice between lowering the
startup cost of the expensive system and building a cheaper system, vendor
business case is stronger to build another system (sans amplifiers, in this case).
What customers lose in this scenario is the ability to scale low-end products to
high-end ones.
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