Capacity Europe 2011: How Can Carriers Expand their Ethernet Footprint and Service Portfolio?

Jim Poole

By Jim Poole

Equinix’s EMEA president, Eric Schwartz, the sole data centre delegate flanked by a pair of network representatives on each side, recently enjoyed a debate around the best ways to expand Ethernet footprint and portfolios.

Eric Schwartz (center) explains the thinking behind Equinix Carrier Ethernet Exchange

With a view that echoed some of the sentiments we’ve already heard from other participants at Capacity Europe this year, Schwartz set his stall out right away.

“The problem we face is that while customer requirements are increasingly global, and the number of global customers continues to steadily increase, there is no carrier that can provide a truly end-to-end global Ethernet offering,” he said.

Moreover, Schwartz explained that as the number of global customers grows, it becomes increasingly difficult to compete with just a local footprint – and therefore co-operation between carriers is a necessity.

If you’d prefer to hear Eric’s view in more detail, watch the short video below:

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If you’d like to see a longer version (runs seven minutes), watch Eric’s view on expanding Ethernet offerings globally (see below).

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Despite a discussion about challenges, the outlook seems bright for Ethernet, with panel host and Director of Business Advisory Services Department at Deloitte Savjetodavne Usluge D.O.O., Dejan Ljustina, sharing figures of an estimated market value of $40bn in 2013!

That’s a significant uplift on figures quoted in our blog from Carrier Ethernet World Congress just a month ago, albeit from a different source.

Ethernet Exchange Services

Panel members expressed an interest in Ethernet Exchange services for slightly different reasons.

Pierre Andre Rulmont, CTO at BICS, saw value in the exchange in acting as a possible driver to help bring about unified end-to-end standards that will help an Ethernet industry that suffers from over complexity in his view.

Jan-Willem Scheerder, Vice President Sales at KPN International, also has high hopes for Ethernet Exchanges, seeing them as a possible channel to market for carriers as well as having the potential to add efficiency to Ethernet dealings between carriers.

One member of the panel, Artur Ostrowski, Senior Vice President and Head of International Services for GTS Central Europe – had direct experience of the Equinix Carrier Ethernet Exchange – which he shares in this video:

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In the interests of fair and balanced reporting, we can reveal that one member of the panel remained unconvinced.

James Walker, Vice President, Global VPN Services at Tata Communications, felt that an exchange was not right for his business – saying Tata had the connections and relationships they needed with regards to Ethernet, albeit the up-front cost of setting this kind of network up is probably not an option for smaller players in the market. Walker also felt there was a risk that Ethernet Exchanges could cause commoditization of Ethernet Services.

Schwartz felt slightly differently saying that the needs of the market were sufficiently diverse to avoid commodization, with or without exchanges.

“The drivers for Ethernet are the growth of rich content and critical applications being migrated to the cloud. This works against commoditization, because we can see that different levels of service quality will be required to meet the needs of the market, allowing differentiation on price. Mission critical enterprise applications will need extremely high quality connectivity, while cloud email and storage may work fine with commodity infrastructure. In short, there is room and demand for multiple models.”