IEC Newsletter

Ethernet Service Interworking and the Evolving Enterprise WAN

Dave Parks
Senior Product Marketing Manager, Data and IP Networking
Ciena Corporation

Ethernet's growing appeal within the enterprise is undeniable, but so is the fact that frame relay (FR) and asynchronous transfer mode (ATM) are not going anywhere anytime soon. By most estimates, Ethernet revenues are growing at a rate of 30 to 50 percent yearly, compared to the stagnation or even decline of FR and ATM revenues. However, in 2005 the combined U.S. service revenue for FR and ATM was approximately $13 billion, and Ethernet services drew only about $687 million [1].

Nevertheless, Ethernet's value proposition is strong, and enterprise adoption of the technology to address metropolitan-area network (MAN)/wide-area network (WAN) needs is building. Ethernet's ability to support more granular and scalable bandwidth requirements, ease of use, and compelling economics make it appealing to enterprises. Ethernet is especially effective at enterprise locations with capacity requirements beyond 10 Mbps, such as headquarters, data centers, or large branch offices.

Ethernet's growing appeal, coupled with the continued reliance on FR/ATM, presents a critical end-user requirement-the ability to create a multiprotocol Layer 2 (L2) virtual private network (VPN) that supports Ethernet, FR, and ATM access. In fact, many enterprise users of Ethernet services state that the number-one hurdle they faced when adopting the service was its lack of interoperability with their current WAN infrastructures-a predicament that can be solved with the development of multiservice interworking.

Service interworking is required to transparently translate one protocol to another, such as ATM to FR, when customer endpoints require unlike protocols. FR to ATM service interworking, defined by the FR Forum's FRF.8, has been standardized since 1995 and is widely deployed in service provider networks. As Ethernet becomes a more widely deployed and consumed service, it too needs service interworking functionality with FR and ATM to support an enterprise's need for L2 VPNs with heterogeneous endpoints.

FR/ATM-to-Ethernet Service Interworking

FR-to-ATM service interworking is far less complex than FR/ATM-to-Ethernet service. FR and ATM are similar data link layer protocols-both are connection-oriented, circuit-based point-to-point technologies that are similar in operation, whereas Ethernet is a broadcast technology.

In an FR/ATM network, the endpoints know the L2 addresses but must learn the L3 addresses, whereas an Ethernet endpoint knows the L3 addresses but must resolve the L2 addresses. This presents a challenge with service interworking FR/ATM with Ethernet endpoints, which is overcome using a method called address resolution protocol (ARP) mediation. ARP mediation outlines the method for IP address resolution in a L2 VPN environment. The address resolution is handled by the service provider's edge equipment and therefore transparent to the end user of the service.

Currently, few service providers offer Ethernet service interworking because, until recently, the equipment vendor implementations have not met carrier requirements. The reason for this is twofold: Traditional Ethernet routing equipment does not provide carrier-grade reliability, and legacy multiservice switching products lack Ethernet service interworking support altogether. But this has all changed thanks to a new breed of equipment that makes this evolution possible.

New next-generation multiservice edge switching solutions combine the critical elements required to support Ethernet service interworking. They deliver carrier-class reliability, high-performance network processing, Ethernet, Internet protocol (IP)/multiprotocol label switching (MPLS), FR, ATM, and time division multiplexing (TDM) functionality, and support for ARP mediation on a single platform. This enables service providers to offer Ethernet service interworking with their traditional L2 VPN data services.

Opportunity and Challenge for Service Providers

As with most networking evolutions, this provides both an opportunity and a challenge for network service providers. The right service interworking implementation manages the migration and revenue shift from legacy services such as FR to next-generation ones such as Ethernet. This capability enables a service provider to protect and grow their installed customer base by offering a future-proof WAN solution that evolves with an enterprise's networking needs. Service providers that ignore their enterprise customers' need for service interworking risk negatively impacting their top-line data revenues. Traditional FR/ATM customers will seek more innovative sources of supply during contract renewals. In addition, service providers without service interworking will less effectively compete for new business opportunities.

The growing need for broad service-interworking functionality will be used to address the following two networking requirements:

Service-interworking gateway between a service provider's disparate data networks
Multiprotocol access interworking within the same data network

The service-interworking gateway functionality enables interworking of enterprise locations supported on a service provider's different networks. One common scenario would be an enterprise user whose current WAN is supported via an ATM network. In parallel, they have business locations supported on a metro Ethernet network. In order for sites on the ATM network to communicate directly and transparently with sites on the Ethernet network, the service-interworking gateway function is required between the two networks.

The Business Case

FR and ATM are highly profitable services in a service provider's data portfolio. Although they have experienced year-over-year price erosion, they continue to maintain healthy margin levels. Compared to Ethernet, their economic appeal is even greater. Ethernet services have a track record of low margins with a very aggressive price per bit. Market pricing for a 10 Mbps transparent LAN Ethernet service is roughly one to two times the price of a 1.5 Mbps FR connection. In addition, the recent wave of M&A activity has also generated a greater need for Ethernet service interworking, as the massive installed base of the long-distance carriers' FR/ATM customers have access to the tremendous metro Ethernet assets of the incumbent local carriers.

Unfortunately, the missed opportunity of providing a migration path to Ethernet creates the risk of losing some if not all of their customers' business. Therefore, constructing WAN solutions that support FR/ATM-to-Ethernet service interworking is very important. Service interworking allows a service provider to deploy FR and ATM where appropriate and continue to scale them independently. This also positions FR and ATM to fill in availability gaps for Ethernet.

A heterogeneous environment of FR, ATM, and Ethernet access offers a measured and deliberate evolution of a provider's installed base. In addition, it allows a service provider to target a competitor's installed base by positioning new technologies such as Ethernet.

Enterprises can leverage service interworking to gradually migrate their WAN over time. Most enterprises prefer this method because deploying Ethernet on an as-needed basis is more cost-effective and less disruptive than switching service providers and/or upgrading their entire WAN.

Service interworking allows an enterprise to extend Ethernet to locations such as headquarters and data centers while branch offices and remote locations continue to use FR/ATM. This selective deployment approach is cost-effective while minimizing disruption to the enterprise's corporate WAN.

Conclusion

Service interworking is quickly becoming a critical feature for service providers to support their L2 VPN products. FR and ATM services continue their dominance in the enterprise WAN arena. However, Ethernet is now a sought-after alternative to high-bandwidth requirements. Because these three access technologies will coexist for many years, and because enterprises want the flexibility of an access technology-agnostic WAN, service interworking is quickly becoming a top opportunity for service providers.

[1] According to Vertical Systems

Educational content provided by Ciena Corporation


June 2006, Volume 2 back to index
Ethernet Service Interworking and the Evolving Enterprise WAN Dave Parks Senior Product Marketing Manager, Data and IP Networking Ciena Corporation Ethernet's growing appeal within the enterprise is undeniable, but so is the fact that frame relay (FR) and asynchronous transfer mode (ATM) are not going anywhere anytime soon. By most estimates, Ethernet revenues are growing at a rate of 30 to 50 percent yearly, compared to the stagnation or even decline of FR and ATM revenues. However, in 2005 the combined U.S. service revenue for FR and ATM was approximately $13 billion, and Ethernet services drew only about $687 million [1]. Nevertheless, Ethernet's value proposition is strong, and enterprise adoption of the technology to address metropolitan-area network (MAN)/wide-area network (WAN) needs is building. Ethernet's ability to support more granular and scalable bandwidth requirements, ease of use, and compelling economics make it appealing to enterprises. Ethernet is especially effective at enterprise locations with capacity requirements beyond 10 Mbps, such as headquarters, data centers, or large branch offices. Ethernet's growing appeal, coupled with the continued reliance on FR/ATM, presents a critical end-user requirement-the ability to create a multiprotocol Layer 2 (L2) virtual private network (VPN) that supports Ethernet, FR, and ATM access. In fact, many enterprise users of Ethernet services state that the number-one hurdle they faced when adopting the service was its lack of interoperability with their current WAN infrastructures-a predicament that can be solved with the development of multiservice interworking. Service interworking is required to transparently translate one protocol to another, such as ATM to FR, when customer endpoints require unlike protocols. FR to ATM service interworking, defined by the FR Forum's FRF.8, has been standardized since 1995 and is widely deployed in service provider networks. As Ethernet becomes a more widely deployed and consumed service, it too needs service interworking functionality with FR and ATM to support an enterprise's need for L2 VPNs with heterogeneous endpoints. FR/ATM-to-Ethernet Service Interworking FR-to-ATM service interworking is far less complex than FR/ATM-to-Ethernet service. FR and ATM are similar data link layer protocols-both are connection-oriented, circuit-based point-to-point technologies that are similar in operation, whereas Ethernet is a broadcast technology. In an FR/ATM network, the endpoints know the L2 addresses but must learn the L3 addresses, whereas an Ethernet endpoint knows the L3 addresses but must resolve the L2 addresses. This presents a challenge with service interworking FR/ATM with Ethernet endpoints, which is overcome using a method called address resolution protocol (ARP) mediation. ARP mediation outlines the method for IP address resolution in a L2 VPN environment. The address resolution is handled by the service provider's edge equipment and therefore transparent to the end user of the service. Currently, few service providers offer Ethernet service interworking because, until recently, the equipment vendor implementations have not met carrier requirements. The reason for this is twofold: Traditional Ethernet routing equipment does not provide carrier-grade reliability, and legacy multiservice switching products lack Ethernet service interworking support altogether. But this has all changed thanks to a new breed of equipment that makes this evolution possible. New next-generation multiservice edge switching solutions combine the critical elements required to support Ethernet service interworking. They deliver carrier-class reliability, high-performance network processing, Ethernet, Internet protocol (IP)/multiprotocol label switching (MPLS), FR, ATM, and time division multiplexing (TDM) functionality, and support for ARP mediation on a single platform. This enables service providers to offer Ethernet service interworking with their traditional L2 VPN data services. Opportunity and Challenge for Service Providers As with most networking evolutions, this provides both an opportunity and a challenge for network service providers. The right service interworking implementation manages the migration and revenue shift from legacy services such as FR to next-generation ones such as Ethernet. This capability enables a service provider to protect and grow their installed customer base by offering a future-proof WAN solution that evolves with an enterprise's networking needs. Service providers that ignore their enterprise customers' need for service interworking risk negatively impacting their top-line data revenues. Traditional FR/ATM customers will seek more innovative sources of supply during contract renewals. In addition, service providers without service interworking will less effectively compete for new business opportunities. The growing need for broad service-interworking functionality will be used to address the following two networking requirements: Service-interworking gateway between a service provider's disparate data networks Multiprotocol access interworking within the same data network The service-interworking gateway functionality enables interworking of enterprise locations supported on a service provider's different networks. One common scenario would be an enterprise user whose current WAN is supported via an ATM network. In parallel, they have business locations supported on a metro Ethernet network. In order for sites on the ATM network to communicate directly and transparently with sites on the Ethernet network, the service-interworking gateway function is required between the two networks. The Business Case FR and ATM are highly profitable services in a service provider's data portfolio. Although they have experienced year-over-year price erosion, they continue to maintain healthy margin levels. Compared to Ethernet, their economic appeal is even greater. Ethernet services have a track record of low margins with a very aggressive price per bit. Market pricing for a 10 Mbps transparent LAN Ethernet service is roughly one to two times the price of a 1.5 Mbps FR connection. In addition, the recent wave of M&A activity has also generated a greater need for Ethernet service interworking, as the massive installed base of the long-distance carriers' FR/ATM customers have access to the tremendous metro Ethernet assets of the incumbent local carriers. Unfortunately, the missed opportunity of providing a migration path to Ethernet creates the risk of losing some if not all of their customers' business. Therefore, constructing WAN solutions that support FR/ATM-to-Ethernet service interworking is very important. Service interworking allows a service provider to deploy FR and ATM where appropriate and continue to scale them independently. This also positions FR and ATM to fill in availability gaps for Ethernet. A heterogeneous environment of FR, ATM, and Ethernet access offers a measured and deliberate evolution of a provider's installed base. In addition, it allows a service provider to target a competitor's installed base by positioning new technologies such as Ethernet. Enterprises can leverage service interworking to gradually migrate their WAN over time. Most enterprises prefer this method because deploying Ethernet on an as-needed basis is more cost-effective and less disruptive than switching service providers and/or upgrading their entire WAN. Service interworking allows an enterprise to extend Ethernet to locations such as headquarters and data centers while branch offices and remote locations continue to use FR/ATM. This selective deployment approach is cost-effective while minimizing disruption to the enterprise's corporate WAN. Conclusion Service interworking is quickly becoming a critical feature for service providers to support their L2 VPN products. FR and ATM services continue their dominance in the enterprise WAN arena. However, Ethernet is now a sought-after alternative to high-bandwidth requirements. Because these three access technologies will coexist for many years, and because enterprises want the flexibility of an access technology-agnostic WAN, service interworking is quickly becoming a top opportunity for service providers. [1] According to Vertical Systems Educational content provided by Ciena Corporation