Metro Ethernet Webinar

1. Metro Ethernet Webinar • Welcome to ‘Business Benefits & Key Applications for the Enterprise’ • A discussion about what business benefits enterprises can and should expect from Ethernet services in metro networks • When: Thursday 6 November 2003, starts 4pm, BST / 11am EST / 8am PST • To participate in this Webinar, call: +44 (0)207 663 4862, access code: 140577

2. Introduction to Ethernet Services A discussion about what enterprises can and should expect from Ethernet services in metro networks

3. Hot topics • Why Metro Ethernet has recently emerged as the hottest area in the telecoms sector • Why are businesses asking for the benefits of metro Ethernet? • Main business applications for Ethernet services • The quest for ensuring QoS • What is the Metro Ethernet Forum (MEF) doing to co-ordinate standards efforts?

4. Panellists • Mark Fishburn, Chairman • Colin Evans, business development & marketing • Frank Brockners, Chief technologist, corporate product and technology marketing • Pat Matthews, Yankee Group Moderator: • Manek Dubash, Contributing Editor

5. Mark Fishburn Chairman of the Board Vice President, Technical Strategy

6. Colin Evans Co-chair, marketing & events committee Business Development and Marketing

7. Frank Brockners Chief Technologist, Product and Technology Marketing

8. Pat Matthews Senior Analyst, Yankee Group

9. Manek Dubash Moderator: Contributing Editor

10. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

11. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

12. Metro Ethernet servicesfor the enterprise Mark Fishburn MEF, Chairman of the Board mark.fishburn@spirentcom.com

13. MEF priorities and scope • MEF Mission: Accelerate adoption of optical Ethernet as the technology of choice in metro networks worldwide • The primary priorities of the MEF are to define: a.Ethernet Servicesfor metro transport networks Such services shall be delivered over native Ethernet-based Metro networks and can also be supported by other transport technologies. b.Carrier-class Ethernet-based metro transport technologiesby specifying architecture, protocols and management for Ethernet-based metro transport networks • Market Objective: Deployment of robust, lower cost, industry standard services that seamlessly enable enterprise applications

14. Critical enabling technical and business deliverables Ethernet as carrier-class transport technology • Services Definition…E-Line and E-LAN • Protection, QoS, OAM, UNI, NNI • New Opex and Capex quantified business cases

15. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

16. Evaluating the challenges/ opportunities for Metro Ethernet services Colin Evans Co-Chair MEF Marketing colin.evans@nativenetworks.com

17. Data traffic growing at more than 200% per year = Spiraling costs Network Complexity Critical applications not getting network resources Loss of productivity Long lead times for deployment of new applications Access Bandwidth limitations Specialised networking skills Challenges/opportunities for Metro Ethernet services in the Enterprise • Reduced Cost • Lower OPEX & CAPEX • Network Simplification • Single Protocol end-to-end and bandwidth flexibility • Performance • Carrier-grade service for carrying mission-critical applications with Guaranteed QoS/SLA • New Applications • Enabled by transparent plentiful bandwidth • Security • Virtual private networks • Simplified Support • Familiarity with the Ethernet technology - common skill sets already employed in the LAN

18. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

19. Business benefits and applications

20. Enterprise IT initiatives & applications Increasing Productivity Addressing Uncertainties Improving Competitiveness Lowering Costs • Application Integration; extended enterprise • New eBusiness-applications • Facilitate better Collaboration • “Triple Play” - voice/video/data convergence • Consolidate IT resource • Server/Storage/Network • Distributed data centers • Improve responsiveness and availability • Resource pooling – Grids, SAN • Business Continuity • Data back-ups / Disaster recovery • New IT model • Outsourced/Outasked/On-demand

21. Changing uses of IT and communicationsApplication moving from LAN to WAN centric Virtualization of business processes across traditional geographic and organizational boundaries E-Commerce Supply Chain Untethered Worker Workforce Optimization Enterprises extend sales reach & lower ops cost Enterprises outsource “context” function Customer Care Enterprises link remote/tele- workers Enterprises achieve efficient & effective collaboration Enterprises build virtual contact center operations

22. Vertical Market Applications Distributed & Bandwidth Intensive Education/Research Retail/ Consumer Financial Services Government Manu-facturing Media/ Entertain-ment • Digital publishing • Digital Media delivery • Digital asset manage-ment • Digital archiving • ERP • Supply Chain Management • E-Learning • Product data Management • Collaborative product Design • CRM • Supply Chain Management • Kiosk • Multichannel retailing • Trading partner collabor-ation • CRM • E-Learning • Smart Branch • Data ware-housing • Out-sourcing • eGovern-ment • Workforce Optimization • E-Learning • eCitizen • Record manage-ment • Grid Computing • Imaging • Visual-ization • E-Learning • Multimedia

23. Technology Flexibility • Based upon Ubiquitous Ethernet “Plug-and-Play” Technology • Transparent transport simplifies network architecture • Guaranteed Bandwidth with Ability to Burst • Clear migration path – leverages existing Ethernet protocol deployment • Flexible, reliable, high-capacity solution No Rigid Bandwidth Limitations • Provides Flexible connectivity site-by-site (e.g. Multipoint L2 VPN) • Multiple service classes per application • Allows Enterprises to support new applications including: • Voice, Video, IP, Multicast etc. Value Scalability • Less expensive alternative to private line, FR/ATM communication networks • Enables Enterprises to deploy new applications quickly & easily with minimal capital investment • Leverage existing human capital – no new training is required • Future viability of Ethernet technology • Significant CPE Cost Savings Why migrate from other services? Metro Ethernet • Supports scalable bandwidth access – from 1 Mbps to 10Gbps and beyond … • Simple migration to higher performance without disruption • Highly reliable carrier-class services with guaranteed performance • Secure communications for mission critical applications

24. Hospital A LL Hospital B LL LL Hospital C Suburban Analysis Lab Case Study: Healthcare Provider • Key requirements • Reliably transport and protect patient data and high-resolution images (X-rays, CAT scans, and MRIs) between sites and across town. • Accuracy of image • Urgency of transfer – “virtually uninterrupted” • Security (highly personal) • Scalability • Picture Archiving and Communication – L-Sping Images are 100 Mbytes and more in size • Mode of operation before migration • A local health system with three locations • Lacking high-speed data connection to each facility • <10M to all sites currently via leased line and frame circuits • Limited budget and IT staff • Multiple LAN environments operating independently

25. Case Study: Healthcare Provider • Case Study Metro Ethernet Solution • Secure, flexible, scaleable, high-speed access delivery of patient data and medical images • Attributes can be enhanced: Bandwidth; Service Classes/SLA (QoS); Security (add IDS,...) • Scaleable architecture that can grow smoothly as applications and demand increase • Introduce new applications over time • Hospital locations can communicate among sites and to lab • Metro Ethernet Solution costs less than one third of Frame Relay • Metro Ethernet (100 Mbps, 1GbE max) • TCO (1 yr): $20.4 K, $0.2/Kb/yr; • compare with FR (45 Mbit/s max) • TCO (1 yr): $63 K $1.4/Kb/yr 100 Mbit/s Hospital A METRO ETHERNET Hospital B 100 Mbit/s Hospital C Suburban Analysis Lab

26. Metro Ethernet Services Mark Fishburn MEF, Chairman of the Board mark.fishburn@spirentcom.com

27. Metro Ethernet Services E-Line Service • Used to create • Private Line Services • Virtual Private Line Services E-LAN Service • used to create • Private LAN Services • Virtual Private LAN Services

28. Examples of Service Attributes Bandwidth Profile: Defines the way in which less than the full physical bandwidth of UNI can utilized by the subscriber. Committed Info Rate (CIR), Excess Info Rate (EIR) Service Multiplexing: Multiple EVCs accessible at a single UNI. Reach multiple destinations across the MEN via a single UNI, e.g., a Gigabit Ethernet UNI. Interworking Function: Non-Ethernet services via an Interworking Function (IWF), e.g., TDM over Ethernet IWF IWF

29. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

30. Market predictions for Enterprise Metro Ethernet Services Pat Matthews Senior Analyst, Yankee Group PMatthews@yankeegroup.com

31. Worldwide Metro Ethernet Forecast Worldwide Metro Ethernet Revenue Forecast 8,000.00 Metro Ethernet CAGR*: 50% 7,000.00 *Forecast Excludes Ethernet Internet Access 6,000.00 5,000.00 Revenue USD Millions 4,000.00 3,000.00 2,000.00 1,000.00 Total Revenue Metro Ethernet: PT-PT, PT-MP, Any-to-Any 0.00 2002 2003 2004 2005 2006 2007 Source: Yankee Group

32. Worldwide Metro Ethernet Forecast Metro Ethernet CAGR: 50% * Forecast excludes Ethernet Internet access Source: Yankee Group

33. Total FR, ATM, and Local PLvs. Metro Ethernet Note: Metro Ethernet still only ~15% of the market in 2007 Source: Yankee Group

34. Ethernet’s capacity benefitssurpass its cost savings Which of the following are Ethernet benefits compared to traditional data services? (Select 1-5 for each item) Beneficial (top 2) Not beneficial (bottom 2) • 80% of respondents rank scalable and higher capacity as best benefits of Ethernet • 62% rank cost savings as best benefit • 7% say savings is not a benefit • Reliability and performance ranked high, too Higher capacity Improved reliability Scalable capacity Increased performance Ability to support new services Easy IT handoff Reduced staff / OPEX Faster provisioning Reduced capital expenditures 0 20 40 60 80 100 Percentage of respondents (n=144) Source: Yankee Group

35. Conclusions • Metro Ethernet today is where IP VPN was three years ago: services need to be clearly delineated, standards need to be solidified, and customers need to understand the ROI • Transition to this technology will need to be painless at every step • Customers need to understand that they will not have to migrate again in two years • In the long run, EPL and EIA will not be enough—WAN replacement is key for the service’s financial sustainability • Ethernet will have a significant share of the metro market in five to seven years

36. Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: • What applications gain efficiency from Metro Ethernet? • The business case for Metro Ethernet – why migrate from other services? • Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

37. Agenda Over to you: Q&A

38. References • Metro Ethernet Services – A Technical Overview • http://www.metroethernetforum.org/metro-ethernet-services.pdf • Metro Ethernet Networks – A Technical Overview • http://www.metroethernetforum.org/PDFs/WhitePapers/metro-ethernet-networks.pdf • Metro Ethernet Case Studies • http://www.metroethernetforum.org/ME_CaseStudies.htm • Metro Ethernet Forum Frequently Asked Questions • http://www.metroethernetforum.org/MEF_FAQ061702_Final.pdf • Yankee Group’s Optical Ethernet report • http://www.yankeegroup.com/public/home/research_showcase.jsp?ID=10480 • An archive of this Webinar can be found at • http://invite.Mshow.com/signon.asp?Cobrand=100&usertype=0&ShowNum=137967%20