ubiquitous carrier ethernet service offering leveraging ethernet access aggregation

Ubiquitous Carrier Ethernet Service Offering

Leveraging Ethernet Access AggregationLeveraging Ethernet Access Aggregation

2® Adtran, Inc. 2008 All rights reserved

Agenda

Business Ethernet Market

Market overview

Service Ubiquity

Equipment overview

Performance monitoring

and SLA management

Questions

® Adtran, Inc. 2010 All rights reserved

How Big Is The Ethernet Service Market


Worldwide Ethernet Services Market

• U.S. revenue was up 24% in 2009 to $4.5B

• EMEA is projected to grow to $10.7B by 2014, 21% CAGR

• Asia/Pacific region grew 22% in 2009 to $6.8B

• Regional revenue is projected to rise to $15.6B by 2014, 18% CAGR

• Rest of World is projected to grow from $642M in 2009 to $2B in 2014

Business Ethernet services are projected to grow

from $16.1B in 2009 to $40.2B by 2014, 20% CAGR

Feb 2010


Regional Demand for Business Ethernet

All Regions continue to expand at Double Digit Rates


2010+ Outlook

Page 11 of 14www.verticalsystems.com

Presentation to the MEF - WW Business Ethernet Market UpdateJanuary 26, 2010

Ethernet OAM

Outlook for 2010+Outlook for 2010+

Vertical Systems Group

Ongoing Fiber Buildouts

Expanded EoC Rollouts

ENNI Standardized

Competition Heats Up

‘Designer’ Pricing

I T Budget Constraints

Higher Speed Demand

More Sub-10 Mbps

10 Gbps emerges

End-to-End Business-Class Experience

L2/ L3 Interworking

Major market initiatives for 2010 include filling in the Big 3 Ethernet Market Gaps and advancements on OAM.

The Big 3 The Big 3 Ethernet Market Ethernet Market

Gaps & OAMGaps & OAM


Regional Demand for Business Ethernet

Global interconnect for Business Ethernet is about service footprint

• Colt and Orange are addressing global enterprise application requirements by capitalizing on existing fiber infrastructures in major commerce centers throughout Europe

• Verizon and AT&T are expanding their Business Ethernet access worldwide

• Deliver pan-European and pan-Asian networks

• Broaden service accessibility for U.S.-based multinational networks


Ethernet Service Drivers

Business Ethernet Drivers

Service Applications Drivers

Dedicated Internet Access

(DIA)

Internet Access DIY VPNs Data/Voice Bundles Hosting

• Migration from TDM lines or DSL• Bandwidth up to Gigabit speeds• Lower $/bit as compared to other options• Convergence offers

EPL&

EVPL

Data Center links Disaster Recovery Video Storage Area Networks

• Migration of TDM PLs• Improve application performance /

reduce latency• Lower $/bit as compared to TDM services

Metro LAN

Intra-metro site connectivity IP Convergence Regional site aggregation

• Migration from Local FR/ATM services• Improve application performance /

reduce latency

Long HaulMesh

Inter-metro connectivity Access to IP/MPLS VPNs Backbone convergence

• Migration from U.S. or global FR/ATM• Greater control than Layer 3 VPNs• “Future proof”, scalable to Gigabit speeds

Vertical Systems Group – ENS

Business Ethernet Drivers

Service Applications Drivers

Dedicated Internet Access

(DIA)

Internet Access DIY VPNs Data/Voice Bundles Hosting

• Migration from TDM lines or DSL• Bandwidth up to Gigabit speeds• Lower $/bit as compared to other options• Convergence offers

EPL&

EVPL

Data Center links Disaster Recovery Video Storage Area Networks

• Migration of TDM PLs• Improve application performance /

reduce latency• Lower $/bit as compared to TDM services

Metro LAN

Intra-metro site connectivity IP Convergence Regional site aggregation

• Migration from Local FR/ATM services• Improve application performance /

reduce latency

Long HaulMesh

Inter-metro connectivity Access to IP/MPLS VPNs Backbone convergence

• Migration from U.S. or global FR/ATM• Greater control than Layer 3 VPNs• “Future proof”, scalable to Gigabit speeds



Ethernet Migration Sources

Business Ethernet Applications & Migration Sources

Service Applications Top Migration Sources

EthernetDIA

Internet AccessDIY VPNsData/Voice Bundles

Migration of IP Circuits Business DSL upgrades

Metro LAN

Intra-metro connectivityIP ConvergenceRegional site aggregation

Migration of DIY IP VPNs Migration from Broadband services Conversions of Local FR/ATM networks

EPL&

EVPL

Data Center linksBackup / Disaster RecoveryVideo transportBackbone connections

Conversions of legacy Local Private Lines Conversions of legacy Long Haul PLs Greenfield applications

Long HaulMesh

Inter-metro connectivityIntegration with IP/MPLS VPNs Backbone convergence

Migration from Dedicated IP/MPLS VPNs Conversions of domestic or global FR/ATM Greenfield applications



Ethernet Purchase Decisions

Main Drivers Are Service Availability And Reliability


U.S. Ethernet Service Addressable Market

Ethernet Service Opportunity

Number of high speed retail access end points based on 2006 U.S. business customer installations

AvailableU.S. Market

3,667,993 Connections

T1/FT1, T3/FT3, DSL


T3/FT3, DSL

Number of connections into buildings with no fiber available

AccessTechnology

Filter


No fiber


No fiber

Number of connections with Ethernet (2 Mbps - 20 Mbps) or (>20 Mbps - 45 Mbps) bandwidth requirement within next five years

ApplicationBandwidth

Filter

971,045 Connections 2 Mbps - 20 Mbps

19,582 Connections

>20 Mbps - 45 Mbps

Addressable market opportunity between 2007 and 2011; includes adjustments for projected service growth / decline

AddressableMarket


5-year target

28,265Connections

5-year target

Ethernet Services2 Mbps - 20 Mbps

Ethernet Services>20 Mbps - 45 Mbps

Vertical Systems Group


5-Year Ethernet Opportunity

The addressable market for Ethernet services (2 Mbps - 20 Mbps) between 2007 and 2011 is 1.1 million connections.

Ethernet over X Opportunity5-Year Target by Technology / Speed

T1/FT1 Frame Relay

T1/FT1 Private Lines

DSL Internet Access

T1/FT1 IP VPN Circuits

T1/FT1 Internet Access

T1/FT1 PBX Circuits

T1/FT1 ATM

T3/FT3 IP VPN Circuits

T3/FT3 Private Lines

T3/FT3 ATM

T3/FT3 Internet Access

T3/FT3 Frame Relay

T3/FT3 PBX Circuits

Total Connections

Technology / Speed

291,575

248,540

225,539

179,069

110,306

43,296

3,330

1,271

1,232

814

642

348

221

1,106,183

# of Connections

26.4%

22.5%

20.4%

16.2%

10.0%

3.9%

0.3%

0.1%

0.1%

0.1%

0.1%

< 0.1%

< 0.1%

100.0%

% of Total

Source: Vertical Systems Group


U.S. Ethernet Service Installations


Ethernet Technology Forecast

Source: Heavy Reading, Carrier Ethernet Access

Platforms Quarterly Market Tracker; January, 2009


What Market Segments & Applications To Target


Ethernet Service - Target Applications

Ethernet is high bandwidth upgrade alternative for…

T1 Point-to-Point and DIA

Frame RelayPoint-to-Point, Multilink

Fiber Where fiber is not available

Wireless retail providers (Starbucks)

Service win back from other T1 providers over the past few years of intense T1 pricing competition

City-Wide WiFi Networks

Internet Access

Point-to-Point between office locations

High-end workers at home

Apartments and Hotels

Executive Suites

Connection to IP PBX via Ethernet

Multilink Frame Replacement (since it can’t support CoS)

E-Rate / Educational

Replacement of point to point Frame Relay

Hosted VoIP

• Healthcare / HIPAA requirements for VPN’s & Ethernet Private Lines Full duplex all speeds

• Video Conferencing

Diverse Routes - EoC (copper) uses different route to building than fiber

CAD/Engineering transmission

Secure Government apps


The Fiber Gap

77% to 88% of Businesses don’t have fiber

2005

2009

11.7%

22.9%

6.9%

15.1%

Business Fiber Availability2005 vs. 2009

% of Buildings w/20+ Employees

EuropeU.S.


Business Ethernet Speed Forecast

10M and sub 10M is the Sweet Spot


Ethernet Market Growth By Speed

Source: Vertical Systems Group

Sub 10 Mbps Ethernet grew at 227% in 2008Sub 10 Mbps Ethernet grew at 227% in 2008

U.S. Retail Business Ethernet Services MarketAll Access Technologies by Speed

0

50000

100000

150000

200000

250000

2007 2008 2009 2010 2011 2012

# P

ort

s b

y S

pe

ed

1 Gbps

100 Mbps

10 Mbps

Sub-10 Mbps

U.S. Retail Business Ethernet Services MarketAll Access Technologies by Speed

0

50000

100000

150000

200000

250000

2007 2008 2009 2010 2011 2012

# P

ort

s b

y S

pe

ed

1 Gbps

100 Mbps

10 Mbps

Sub-10 Mbps


Ethernet Service Target Market

Displace T1s– DIA – 30%, Frame Relay – 26%, Private Lines – 22%, IP VPN

Circuits – 16% and PBX – 4% Multi-Location

– Financial, Medical, Insurance, Schools, Gov’t, Business Offices Sub 10Mbps

– Fastest growing market segment 10Mbps

– Market sweet spot Up to 45Mbps

– Upsell existing customers to higher rates [beyond 10Mbps]

Many opportunities to ramp high growth revenueMany opportunities to ramp high growth revenue


5.6%

24.4%

25.5%20.2%

24.1%0.2%

10 Mbps

10 - 15 Mbps

15 - 20 Mbps

20 - 25 Mbps

25 < 30 Mbps

45 Mbps

Typical 10Mbps EoC Deployment

Upsell bandwidth at no additional costUpsell bandwidth at no additional cost

70% of 10Mbps customers can be up-sold bandwidth Average of 4.48 pairs deployed per customer

• More bandwidth is available by deploying 8 pairs per customer

Bandwidth available to 10Mbps Customers


Understanding the Importance of Delivering Carrier Ethernet to the BusinessUnderstanding the Importance of Delivering Carrier Ethernet to the Business

Business Ethernet Service Delivery


Ethernet over CopperEthernet over Copper

EoCu OSSEoCu OSS

Addressing the Coverage Gaps

Increasing coverage with disparate technology models limits revenue and profitability– Slow customer response time– Disparate systems increases operational complexity– Management methods and capabilities vary between systems

Ethernet over FiberEthernet over FiberEthernet over TDMEthernet over TDM

EoF OSSEoF OSSEoTDM OSSEoTDM OSS

Different Platforms per Access Technology Limits Solution Value and Increases Operation Complexity and Cost

Different Platforms per Access Technology Limits Solution Value and Increases Operation Complexity and Cost


Addressing the Coverage Gaps

Agile coverage model enables new business– Ubiquitous coverage– Expediting New Applications/Services– Capable and consistent management

Improved Reliability Assured QoS and SLA management Testability and Troubleshooting

– Improved Scalability

Unified OSSUnified OSS


EoCu, EoTDM, EoFCompleting the customer reach puzzle

• EoCu – Ethernet over Copper– Optimized bandwidth per loop– Perfect for short to medium length loops– Requires local deployments & loop access

• EoTDM – Ethernet over TDM– Predictable bandwidth per circuit– A FastBreak™ toward customer deployments– Minimizes CapEx by centralizing aggregation

platform

Ethernet over Fiber– Active Ethernet for higher rate business service

offerings

• Combination enables ubiquitous coverage– Complete Ethernet solution from 2 , 10,

100+Mpbs to 1 Gbps– Consistent service offering


Ubiquitous Ethernet Service Offering

EoC 45Mbps - 4Kft

EoC 10Mbps -12Kft

EoTDM 12Mbps -beyond 12Kft


ADTRAN Carrier EthernetGetting Customers, Keeping Customers

• Acquiring new customers with improved profitability– Increased revenue via new service

enablement– Reduced CAPEX by leveraging existing

assets– Reduced OPEX with simplified OAM&P

• Retaining existing customers with quality, reliable service– Scalable, granular QoS mechanisms– Compatibility with adjacent DSL

applications– Innovative solutions such as ADTRAN

AnyPortTM bonding and TScanTM diagnostic tools


A Single Centralized SolutionSingle Platform, Common OAM&P, Full Coverage


ADTRAN CARRIER ETHERNET

Architecture OverviewArchitecture Overview


A Single Centralized SolutionSingle Platform, Common OAM&P, Full Coverage

Partial Vision of Single Operational Model– Single Service and Maintenance

Launch Point– Full suite of dedicated, low cost

Ethernet Access Gateway for every access medium

34® Adtran, Inc. 2007 All rights reserved Proprietary and Confidential

Ethernet over TDMLegacy Transport Solutions

• DS1 32-Port Line Module– EFM bonding—any port to any port– Aggregation of Ethernet over TDM “Fast Break”

circuits

• 4 port DS3 EFM Access Module– EFM bonding support – Full featured diagnostic and loop test capabilities– 1:1 Redundancy

• 3 port channelized DS3 EFM Access Module– EFM bonding support – Supports any order bonding across DS3s– 1:1 Redundancy

35® Adtran, Inc. 2007 All rights reserved Proprietary and Confidential

TA5000 EoCu Delivery Mid-band Ethernet Solutions

• E.SHDSL 32-Port Access Module– EFM bonding support – any port to any

port– Sealing current for loop conditioning– TScan® advanced diagnostic tools

• E.SHDSL 24-Port Access Module– EFM bonding support – any port to any

port– Sealing current for loop conditioning– TScan® advanced diagnostic tools


ADTRAN EFM NTUEvery Rate, Every Reach, Everywhere

The NetVanta 800 Series NTU– MEF certified and compliant– 2, 4 & 8 port bonding solutions

Robust Ethernet capabilities– Common Ethernet switching and bonding engines– Resilient to loop failures with dynamic link adaptation

NCTE Technology Rate per port 2 Port 4 Port 8 Port

814, 818 T1 1.5 Mbps 814(8 pair)

818(16 pair)

828 HDSL2 1.5 Mbps 828 (8 pair)

832, 834, 838 E.SHDSL Up to 5.7 Mbps 832(2 pair)

834(4 pair)

838(8 pair)

844 HDSL4 1.5 Mbps 844(8 pair)

86x VDSL2 1 – 100 Mbps 864(2010)

868(2010)

873 DS3 45 Mbps 873(3 port unchannelized DS3)


NetVanta EoCu Network Termination

NetVanta 838 NetVanta 838T

ADTRAN EoCu (e.SHDSL) NTU

Interface(Quantity)Type; Connector

Environmental Hardening

Power Supply

Model Part No. 10/100T GigE Network Temp.* EP* OSP* DC AC

NetVanta 838

1200633G4 (4) RJ-45 (1) SFP(1) RJ-21(8) Cu pairs

Yes No No-48 or +/-24V

Convertor P/N

1202470E1

NetVanta 834

1200633G6 (4) RJ-45 (1) SFP(1) RJ-21(4) Cu pairs

Yes No No-48 or +/-24V

Convertor P/N

1202470E1

NetVanta 832

1200718E1 (1) RJ-45rear access

No(1) RJ-45 rear

(2) Cu pairsNo No No No

110 – 240V

NetVanta 838T

1172838G1 (4) RJ-45 No(8) RJ-45(8) Cu pairs

Yes No No No110 – 240V

NetVanta 834T

1172834G1 (4) RJ-45 No(4) RJ-45(4) Cu pairs

Yes No No No110 – 240V

NetVanta 832T

1172832G1 (4) RJ-45rear access

No(1) RJ-45 rear

(2) Cu pairsNo No No No

110 – 240V

NetVanta 838 EP

1172839G1 (2) RJ-45 (1) SFP(8) RJ-45(8) Cu pairs Yes Yes No

-48 or +/-24V

No

NetVanta 838 OSP

1172830G1 (2) RJ-45 (1) SFP(8) RJ-45(8) Cu pairs Yes Yes Yes

-48 or +/-24V

Convertor P/N

1172290G1


NetVanta 838 (834) NTU4 or 8 pair e.SHDSL

Network interface: Up to 8 (4) bonded e.SHDSL ports– Line Rate : 200kbps to 5.7Mbps per loop– Resiliency through dynamic circuit removal and restoration– Front Access 50 pin RJ-21 (AMP) – ITU-T G.991.2 Annex A

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Single Gigabit Ethernet interface via SFP– Rackmountable solution in 19” or 23” racks– Wallmountable– +/- 24VDC, -48 VDC, AC local powering


NetVanta 818 (814) NTU4 or 8 DS1

Network interface: Up to 8 (4) bonded DS1/E1 ports– 1.5 / 2 Mbps to 12 / 16Mbps– Resiliency through dynamic circuit removal and restoration– Front Access 50 pin RJ-21 (AMP)

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Single Gigabit Ethernet interface via SFP– Rack mountable solution in 19” or 23” racks– Wallmountable– +/- 24VDC, -48 VDC, AC local powering


NetVanta 873 NTU

Network interface: Up to 3 EFM bonded DS3 ports– 45Mbps to 134 Mbps – Resiliency through dynamic circuit removal and restoration– Front Access 75 ohm BNC

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Single Gigabit Ethernet interface via SFP– Rack mountable solution in 19” or 23” racks– Wallmountable– +/- 24VDC, -48 VDC, AC local powering


NetVanta 832T

Network interface: Up to 2 bonded e.SHDSL ports– Line Rate : 200kbps to 5.7Mbps per loop– Resiliency through dynamic circuit removal and restoration– Rear Access RJ-45 – ITU-T G.991.2 Annex A/B

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Desktop unit– AC powering via desk supply


NetVanta 834T

Network interface: Up to 4 bonded e.SHDSL ports– Line Rate : 200kbps to 5.7Mbps per loop– Resiliency through dynamic circuit removal and restoration– Front Access RJ-45 per port – ITU-T G.991.2 Annex A/B

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Rack or Wall mountable– Universal AC powering


NetVanta 838T

Network interface: Up to 8 bonded e.SHDSL ports– Line Rate : 200kbps to 5.7Mbps per loop– Resiliency through dynamic circuit removal and restoration– Front Access RJ-45 per port – ITU-T G.991.2 Annex A/B

Physical– Four 10/100 Bt Ethernet interface via RJ-45– Rack or Wall mountable– Universal AC powering


NetVanta 8044 Physical Specs

Front Panel Interfaces– 4 -10/100/1000BaseT LAN/WAN– 4 -100/1000BaseX SFP LAN/WAN– DB9 local craft (RS-232)

Mounting Options– 1 RMU Wall, Rack or Desktop

Mounting– 19” or 23” Universal brackets,

rubber feet.

Powering Options– Wide mouth Universal AC powering.

AC/DC Power Convertor kit option IEC cord set options to provide

EU plug or Australian 10 A/240 V 100 – 240 V at 50 or 60 Hz. Grounding via Post and Lug type

conn.

Dimensions – Height: 44mm (1 RMU)– Width: 437mm or 483mm (with

mounting brackets)– Depth: 254 mm or 301mm (with

fibre guide)

Weight – 6 lb– 2 ¾ kg

Power – 18W worst case/fully loaded– 14W typical

NetVanta 8044


Ethernet over Fiber Components

TA5000 8-port Gigabit Ethernet Access Module– 8 GigE SFP cages– Link Aggregation– Link OAM

NetVanta 8044M – 4 -10/100/1000BaseT WAN or LAN– 4 - GigE SFP WAN or LAN– 2 - Expansion Slots – 1 and 2.5G ERPS Ring support with optical bypass option.– Clock Sync over Packet Ready e.g. G.8261/62 SyncE– Dual fed DC options (+/-24V, -48V DC)

Carrier Ethernet– MEF 9, 14, 18– Eth OAM CFM and PM– TACASC+ and RADIUS Authentication, Authorization

8-port GigE Access Module NetVanta 8044M Modular NTE


EoCuCPE

EoCuAggregation

ADTRAN EoCu OAM&PStandards based

TSCAN diagnostic capability– FaultDetector™– SpliceDetector™

EFM OAM for trouble isolation/ detection– Link performance monitoring– Fault detection– Loopbacks

Ethernet OAM– Continuity check – Loopback– Link Trace– Round trip delay– Loss measurements – using continuity check messages

Comprehensive Operational Measurements / Statistics– Physical Loop and Ethernet statistics captured in 15-minute and 24-hour

buckets– End-to-End and segment-based monitoring (IP SLA equivalent)– Alarm signaling– Threshold alarming


Ethernet OAM –Supporting/Selling Ethernet SLAs

MEN

SwitchSwitch

Leased TDM

SONET

IEEE 802.1ag

IEEE 802.3ah

ITU-T Y.1731IETF T-WAMP

802.

1aj

Dem

arc

802.

1aj

Dem

arc

Access Links OAM

Connectivity Layer OAM (per EVC)

Service Layer OAM (per UNI)

NTU (UNI)

NTU (UNI)

Common OAM&P across NV800 and 8000 series NTU


ADTRAN EoCu OAM&PStandards based SLA monitoring

Two-Way Active Measurement Protocol– Jitter and Latency measurements for

SLA guarantees

– NCTE implementation draft-ietf-ippm-twamp-04. Session reflector/server Ethernet OAM

Physical layer turn-up and troubleshooting tools– Loopbacks– Bit Error Rate Testing capabilities


ADTRAN Ethernet OAM

IEEE 802.1ag ITU-T Y.1731

Detection Notification Verification

Isolation IETF TWAMP ITU-T Y.1731

Delay Jitter Loss

Multiple paths for both Fault & Performance Management

Co

nn

ecti

vity

Fau

lt

Man

agem

ent

(CF

M)

Per

form

ance

M

anag

emen

t

IEEE 802.3ah

Link OAM


Simplified Ethernet Service Activation

• Minimize operational costs associated with Ethernet service rollouts– Pre-provisioning by Operations Centers

in advance of NCTE– Allows for easy service activation

• EZ Series for Ethernet activation– EZ Bonding: Link assignment– EZ Set-up: NTU pre-provisioning– EZ Ethernet: User profiles


EASY ELAN Service Provisioning

Same Wizard Screens as for EPL and EVPL.

Allows single S-tag to be configured on multiple ports with MAC switching of traffic between those ports


ADTRAN Operations Environment

Strong Decision SupportFault ResponseAdvanced testing, troubleshooting and diagnostics

Flexible Integrated Security

Fully Integrated from Planning to Operations to Customer Service

Intelligent Service ActivationApplication awarenessOSS integration via Robust Modular

Gateway/Network Automation Interface (TL1/XML)

Advanced PM, Traffic and Capacity Management Performance Monitoring/Trending

Traffic Engineering/Network Tuning

VQM/DQM

Ubiquitous Carrier Ethernet Service Offering

Leveraging Ethernet Access AggregationLeveraging Ethernet Access Aggregation

ubiquitous carrier ethernet service offering leveraging ethernet access aggregation

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