Most optical networking strategies are based on the unspoken assumption that the goal of these new technologies is to improve carrier networks. That’s not entirely accurate. Actually, optical networks succeed or fail to the degree that they effectively meet enterprise needs.

That may sound counterintuitive, but it makes sense. Most of the traffic carried across optical networks comes from enterprise applications, whether public (online banking or Internet applications) or private (data warehousing, storage networking, or other special-purpose applications). Additionally, enterprises are often direct consumers of optical products. Companies in technology-intensive industries such as financial services, pharmaceuticals, and entertainment, for example, often set up their own optical networks using leased or dark fiber from service providers. These enterprises have requirements for POS interfaces, DWDM muxes, and optical crossconnects that often differ considerably from those of service providers.

Of course, carriers and enterprises have different needs. Scaleablity is not always essential for enterprises, for instance, while ease-of-use and granular manageability usually are. Fundamentally, therefore, the key to understanding which products and services will succeed in the optical market lies in understanding these requirements.

First and foremost, enterprises will spend money if you can deliver a measurable return on investment (ROI). Although enterprise IT spending is down overall this year (as we’re all too painfully aware), companies are still investing in areas that can demonstrate ROI. Despite the slowdown, bandwidth requirements for enterprises continue to increase, which means enterprises must either buy more capacity or leverage the existing physical capacity to reduce new expenditures.

To see how the cost-benefit equation breaks down for enterprises looking to deploy optical infrastructure, you have to consider both tangibles and intangibles:

Costs: Tangible costs include capital equipment, maintenance, deployment costs, and direct (e.g., product-specific) training costs. Intangible costs include general training (e.g., a primer on optical technologies, which may be required for IT managers who are coming up to speed on unfamiliar technology), network design and implementation, support and monitoring.

Benefits: Benefits include the flexibility of locating IT and network resources where they are most cost effective or easiest to support (rather than being constrained by bandwidth availability); the ability to deploy applications such as WAN-based storage and real-time transaction backup; the ability to provide application QoS (quality of service); and the ability to consolidate data centers, thereby reducing management costs.

The new optical networking technologies help meet these goals in several ways. In the old days — say, 18 to 36 months ago — enterprises used ATM over Sonet, which imposed both bandwidth overhead (the dreaded “cell tax”) and bandwidth availability constraints (since bandwidth had to be purchased in discrete “chunks”). Some companies have turned to POS (packet over Sonet) as a way to overcome these issues; while POS generally represents an improvement, it has its limitations.

A more current approach, Ethernet over optical (DWDM or CWDM), goes a long way towards reducing capital expenditures and enhancing the capability for dynamic bandwidth allocation. Additionally, this approach has the advantage of reduced intangible costs (users require minimal overall training, since Ethernet is a familiar technology to most).

Some newer products on the market improve on this already good idea still further: Companies such as Luminous Networks Inc. make it possible to integrate voice and data over gigabit Ethernet in metro area networks using technologies such as RPR (resilient packet ring). Companies like Atoga Systems enable applications to map to the IP or optical transport types (discrete lambdas, Sonet frames, or IP tunnels) that deliver the most appropriate QoS — a capability that’s interesting to enterprises. In sum, optical products and services that effectively meet enterprise needs will be successful in both the service provider and enterprise markets.

By Johna Till Johnson, SVP & CTO,
with Richard Gondek, Practice Leader, Internetworking,
Greenwich Technology Partners.

Published in Light Reading