After 30 years of success in the City, service providers take Ethernet into a wider future

Banking and insurance drive demand for greater bandwidth and scalability


Banking and insurance drive demand for greater bandwidth and scalability

At the age of 31, Ethernet has established itself as a reliable and flexible networking technology, both within and outside metropolitan areas. Over the past three decades, several trends have emerged in the market.

Ethernet is branching out of the city. Service providers have begun to extend their Ethernet products into the wide area network and more national and international locations are now connected via Ethernet.

Companies continue to upgrade to Ethernet services, but do businesses truly understand the technology? And do they see the benefits beyond the metropolitan area? Is it possible to predict a future for Ethernet?

Ethernet evolution

If we look at the technology itself, Ethernet was traditionally a local area network technology, connecting devices and applications that were in close proximity, often within a single building. It is frequently referred to as the "language of the Lan" since most Lans are built on Ethernet.

The first implementation of Ethernet in a Lan, in 1973, ran at 3mbps half duplex. This enabled a workstation to either transmit or receive data but not simultaneously. Because it used a shared medium - all user workstations connected to the common "ether" - it needed a method of arbitration to decide when the workstations could access the Ethernet.

Originally developed in the 1960s, carrier-sense multiple access with collision detection (CSMA/CD) was introduced to work with Ethernet. With the introduction of Ethernet switching in the 1980s, full duplex mode between nodes became available and a workstation could transmit and receive data concurrently.

In 1998, the Gigabit Ethernet standard (IEEE 802.3z) was released, which allowed for full duplex mode at speeds of 1gbps over arbitrary lengths. This was the beginning of the Ethernet revolution.

Metropolitan area networks

Since the late 1990s, Ethernet has developed into a metropolitan area network (Man) technology, providing fast, reliable and cost efficient connectivity between multiple Lans across cities via dedicated fibre or DWDM (dense wavelength division multiplexing).

Enhancements to the technology and a significant improvement in price/performance have enabled Ethernet to handle ever-larger network topologies. It is now well positioned to become a transport technology of choice across the Wan.

European market trends show there has been a huge demand for Layer 3 virtual private network (VPN) services. Research from Analysys in 2004 showed a marked growth in Ethernet and VPN-based services. Both have overtaken ATM (Asynchronous Transfer Mode) and Frame Relay networks.

The lines between different Ethernet services can appear blurred, but it is clear that it is an extremely adaptable type of network technology, which would explain its growth.

Business is becoming increasingly reliant on sophisticated, real-time data applications. Companies are also exploring advanced IP voice, video and multimedia communications.

Higher bandwidth is needed to ensure companies' increased volumes of traffic are delivered consistently. Users are requiring bandwidth on demand to fulfil the needs of their applications. Ethernet enables companies to achieve this.

Gartner forecasts that business Ethernet services in Western Europe will grow by an average of 48% a year over the next four years as businesses extend their operations and focus on improving operational efficiency and risk management.

Ethernet connectivity is highly efficient and enables companies to reuse their existing network skills from the Lan environment and extend their reach into the Man and Wan without the need for additional training or network integration. Deploying Ethernet as a single protocol from end-to-end in the Man/Wan can also make network management simpler.

Bandwidth scalability is a key asset in Ethernet deployment. Unlike the rigid predetermined bandwidth settings of traditional leased lines, Ethernet offers users the flexibility to increase or decrease the amount of throughput bandwidth they require to fit their needs.

Many providers will start to offer Ethernet on demand, which will enable corporates to change their bandwidth throughput levels at the touch of a button. This can also be set to specific times, allowing companies to transfer large amounts of data at one time in the day rather than constantly.

Where to next?

Over the past four or five years there has been a surge of interest in Ethernet across Europe. The greatest demand is from London-based companies, although Frankfurt, Amsterdam and Madrid are close behind.

It is predominantly the banking and insurance sectors that are driving demand for more bandwidth, scalability and security. However, expect to see significant adoption across all sectors during 2005 and beyond.

Ethernet connectivity is emerging as a key component for bridging the gaps from the access network to the customer demarcation. New Ethernet connectivity services will enable companies to use cost-effective high bandwidth in the metropolitan and wide areas too, reducing bottlenecks, making more efficient use of applications and improving performance.

The next stage, which we have just entered, is the introduction of Ethernet VPNs, where users get the shared infrastructure benefits from VPNs and the Layer 3 transparency of an Ethernet-based connectivity service.

Easiest to implement

Ethernet has been, and will continue to be, the easiest protocol to implement in any type of network topology. It is also the most widely used protocol, supporting data, voice and video traffic. It is simple to install and maintain, ever-present throughout the industry, and there are well defined standards along with a worldwide industry supply chain.

Martin Maters is general manager of Ethernet and bandwidth services at BT Global Services

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