Tài liệu Business Case for Remote Ethernet Testing docx

Business Case for Remote Ethernet Testing This white paper examines the substantial financial impact that the remote Ethernet testing solution from ADC and EXFO can have on service provi

Business Case for

Remote Ethernet Testing

This white paper examines the substantial financial impact that the remote Ethernet testing solution from ADC and EXFO can have on service providers offering Ethernet services to enterprise customers.

As revenues from traditional circuit-switched voice lines steadily decrease, service providers recognize that Ethernet access and related services represent the future As a result, they are shifting investment away from legacy data services such as ATM or Frame Relay and towards flexible Ethernet access solutions But service providers face a variety of technical challenges when deploying Ethernet networks, and these issues can cause significant increases in operational expenses In particular, Ethernet commissioning and maintenance have been expensive endeavors compared to traditional alternatives A lack of deployed remote test solutions frequently results in on-location troubleshooting and maintenance This time-consuming activity adds up to high support costs The recent ratification of the IEEE 802.3ah Ethernet in the First Mile (EFM) testing standard offers significant opportunities for service providers to reduce operational expenses and more quickly deploy Ethernet services Test solutions based on the 802.3ah guidelines address all of the key challenges commonly encountered with Ethernet service deployment: reliability, performance, Quality

of Service (QoS), SLA assurance, and network troubleshooting

To address these critical issues, ADC and EXFO have created a two-component 802.3ah-compliant remote testing solution using the ADC Ethernet Network Interface Unit (ENIU) and EXFO’s Packet Blazer™ Gigabit Ethernet tester Remote testing using the solution from ADC and EXFO results in significant financial benefits for service providers—network downtime is significantly reduced, Service Level Agreements (SLAs) are assured, and customer retention is increased This white paper examines these benefits in detail

Business Case for

Remote Ethernet Testing

ROI Methodology and Highlights

ADC and EXFO collaborated with an independent

research organization which specializes in ROI and cost

benefit analysis to perform an objective study of the

financial returns generated by the deployment of their

Ethernet testing solution The scenario examines the

results and return on investment for a service provider

deploying 10 EXFO Packet Blazers™, each used in

conjunction with 40 ADC Ethernet Network Interface

Units (ENIUs), for a total of 400 remotely accessible

customer installations The ROI scenario scales with size,

so larger deployments, for example, will realize greater

gains

A detailed business analysis of the solution reveals the

following highlights, based on a five-year study period:

• The cumulative net value of the solution is projected in

excess of $735,000, driven by operational (OPEX)

savings and SLA penalty avoidance

• The cumulative OPEX savings are greater than

$642,000

• The savings in avoided SLA penalties totals more than

$330,000

• The return on investment will exceed 400%, with a

payback period less than 16 months

Challenges with Deployment of

Ethernet Services

For service providers, the writing is on the wall—deploy

Ethernet services or lose business and miss out on an

expanding market Customers are demanding more

bandwidth at increasingly lower price points, and with

Ethernet offerings from traditional carriers, multi-service

operators (MSOs), cable and internet providers, there are

plenty of competitive choices to choose from

Ethernet is the least-expensive way to offer low-cost

bandwidth It is a mature, plug-and-play technology that

integrates easily into corporate LANs Ethernet has other

benefits for service providers in addition to its low cost

It allows carriers to easily scale bandwidth to the exact

amount requested by customers—it can be charged in

increments, and upgraded in increments as well By way

of contrast, legacy services are not easily scaled T1 lines,

for example, can only be incremented in multiples by

installing and testing an additional line—a lengthy,

expensive procedure

The growth of Ethernet services also represents a

significant revenue opportunity for access providers The

expansion of metro Ethernet services will lead to

extensions in WAN applications including Ethernet Private

Lines, Ethernet Internet Access, and Virtual Private LAN

Services (VPLS)—a pattern that fuels additional demand for infrastructure and services Ethernet services are growing at a fast clip, with an estimated global market

of $22 billion by 20091 There are issues with Ethernet deployment as it moves from the LAN to the WAN via metro access networks Ethernet is typically implemented as a “best-effort” service, and traditionally has not met mission-critical reliability Yet customers migrating to Ethernet access lines expect the same availability and service guarantees

as frame relay, ATM, T1, and other legacy services which have extensive management tools available to assure service quality Without remote test and monitoring, it is difficult for service providers to commit to and meet SLAs which can differentiate their offerings and assure customers that their Ethernet services are business-class

The Ethernet Testing Solution from ADC and EXFO

Until recently, Ethernet commissioning and maintenance were expensive endeavors compared to traditional alternatives The challenges faced by Ethernet service providers result in high operations and maintenance costs The most common challenges are (Yankee Group, 2003):

• Performance problems (latency, packet loss, decreased throughput, etc.)

• Assuring the reliability of routers and other multi-service equipment

• Maintaining QoS/assurance of SLAs

• Element management and troubleshooting

As with legacy services, these problems are best overcome with standards-based monitoring and remote test tools The recent ratification of the IEEE 802.3ah Ethernet in the First Mile (EFM) testing standard offers significant opportunities for service providers to more quickly deploy Ethernet services and reduce their operating expenses The 802.3ah standard was modeled after legacy service management, allowing test solutions based on these guidelines to be easily integrated into existing operational support and element management systems

ADC and EXFO have released a joint solution for remote Ethernet testing based on 802.3ah that offers significant benefits to service providers Its remote troubleshooting abilities result in fewer truck rolls Because it can perform single-ended testing, it allows faster turn-up and restoration of services Its proactive network management can reduce network downtime and increase network availability Finally, standards compliance allows easy integration into existing operational practices

1 Infonetics Research (May 2005)

The solution is made up of two components: the ADC Ethernet Network Interface Unit (ENIU) and the EXFO Packet Blazer Gigabit Ethernet test set The ADC ENIU is installed at remote locations between customer LANs and access switch ports, defining demarcation points between a provider’s network and its clients Typical ENIU installations are shown in the diagrams below

The ENIU supports remote loopback, remote alarm indication, media conversion, bandwidth provisioning and link monitoring EXFO’s Packet Blazer offers a complete Ethernet test suite, including frame analysis, packet jitter, latency, throughput, and bit error rate testing By activating an ENIU’s loop-back mode, the Packet Blazer can remotely test the provider’s network up to the given customer location

How the Solution Is Used

When a customer reports a problem with an Ethernet service, the cause is often related to events or constraints within the customer’s network Remote testing with the solution from ADC and EXFO allows service providers to quickly segment the network up to the customer premises and subsequently determine if a network issue is within the access line (service provider’s responsibility) or related to customer-side problems (no further support required) This technique significantly reduces truck rolls to customer premises and results in faster problem resolution If the issue is found to be within the provider’s network, the Packet Blazer can be used to remotely diagnose the problem, speeding service

restoration and minimizing on-site maintenance costs

Metro

Network

X-Base-SX or LX Fiber

X-Base-TX UTP Copper

10/100/1000 Mbps Ethernet Link

10/100/1000 Mbps

Demarcation Point

Provider Network

Customer Network

Carrier Provided Switch

Customer Provided Switch ENIU

GigE Access Link

200 Mbps

100 Mbps

10 Mbps

Demarcation Point

Carrier Provided Switch

Customer 2

Customer 1

Customer 3 ENIU

ENIU

ENIU

Typical ENIU installation on an Ethernet access line Although this diagram depicts an optical network interface,

the ENIU can be deployed with optical and/or electrical interfaces on the network and customer sides.

As an alternative deployment, several ENIUs can be connected to a single carrier-provided switch to provide

separate demarcations when there are multiple customers connected to a single access link.

In recent studies with North American multi-service operators, maintenance costs associated with Ethernet services were reduced by up to 50% when 802.3ah remote test solutions were implemented2

Remote testing can also be used for commissioning, monitoring, and SLA management As an example, remote

bandwidth provisioning is a unique, revenue-generating feature of Ethernet which can be greatly simplified using 802.3ah-based remote testing tools When a customer requests additional bandwidth, the related ENIU is remotely instructed to increase throughput on the access link The ENIU is then put into loop-back mode and remote Ethernet performance tests are conducted to ensure that the expected bandwidth will be met by the backhaul/access network A series of simulations are then conducted to ensure that revised SLA parameters will be met under various customer traffic conditions With the new bandwidth assured and commissioned, the ENIU is returned to pass-through mode and the customer benefits from the upgraded link

The following figures illustrate three different possible ways the solution can be used

2 Light Reading, Feb 2004

Central Office

Metro Network SONET/SDH/DWDM

Ethernet tester

Ethernet Switch

Customer Premise

ENIU

Remote Management

NOC

Remotely troubleshooting performance on a link or provisioning bandwidth from a central office with

customer-site ENIU in loop-back mode

Metro Network SONET/SDH/DWDM

Ethernet Switch

Ethernet Tester

Ethernet Switch

Customer Premise 1 (under test)

Customer

Premise 2

Central Office

Metro Network SONET/SDH/DWDM

Ethernet tester With ENIU discovery

Ethernet Switch

Customer A

NOC

Remote Management

ENIU

B

ENIU 3

ENIU

2

Customer

C

Database

Customer ENIU

A 1

B 3

C 2

In a Virtual Private LAN or Ethernet Private Line, a portable Ethernet tester can be used to test performance

or troubleshoot from one customer location to a second site where an ENIU is installed.

If a large number of ENIUs are deployed in a provider’s network, discovery algorithms actively catalog their

location and status to facilitate remote testing operations.

Business Case for the Solution from ADC

and EXFO

The combination of ADC’s ENIU and EXFO’s Packet Blazer

provides a highly cost-effective Ethernet deployment and

maintenance tool for service providers This solution can

significantly reduce operational expenditures while

increasing network availability and reliability Mean time

to repair (MTTR), often a cornerstone of SLAs, can be

substantially reduced when the solution is deployed

A business model created by ADC and EXFO in

conjunction with an independent research organization

examines the results and return on investment for a

service provider deploying 10 EXFO Packet Blazers, each

used in conjunction with 40 ADC Ethernet Network

Interface Units (ENIUs), for a total of 400 remotely

managed customer installations The scenario is scalable

up or down in size, so larger deployments, for example,

will realize greater gains

A detailed business analysis of the scenario shows that

the Ethernet testing solution from ADC and EXFO has

the following bottom-line benefits over a five-year

period:

• The cumulative net value of the solution is projected in

excess of $735,000, driven by operational (OPEX)

savings and SLA penalty avoidance

• The cumulative OpEx savings are greater than

$642,000

• The savings in reduced SLA penalties totals more than

$330,000

• The return on investment will exceed 400%, with a

payback period less than 16 months

An Examination of the OPEX Savings

Operational savings are primarily due to a significant

reduction in the cost of handling trouble tickets for

service on an Ethernet network Based on studies with

U.S multi-service operators (MSOs)3, the scenario

assumes that on average, there would be three annual

trouble tickets per location It also assumes that

technicians are paid $50 per hour, and that the mean

time to repair is 4.5 hours

Without the solution from ADC and EXFO in place,

resolving trouble tickets at each location would require

an average of two truck rolls per location per year

Because of the ability of the solution to perform remote

troubleshooting, the number of truck rolls can be cut in

half, to one truck roll per location per year

This reduction in truck rolls adds up to significant savings

over five years When the numbers are calculated for the

cumulative savings over five years for all locations, it results in cumulative five-year OPEX saving of more than

$640,000

Although not quantified, an additional OPEX savings can

be achieved during the service turn-up cycle Since the system supports single-ended testing, the ENIU can be predeployed at the customer site When the customer service contract is finalized, the Ethernet service can be turned-up, tested and commissioned remotely via the Packet Blazer at a central location An operation which currently requires technicians at both ends of the circuit will only require one Resource coordination is minimized and revenue-generating services are initiated sooner

An Examination of the SLA Savings

The solution from ADC and EXFO also offers significant SLA savings because it helps service providers reduce SLA violation penalties These penalties are commonly paid if

a guaranteed level of service is not met The most common SLA violations relate to lower than expected network availability This remote Ethernet testing solution cuts down on the number of SLA penalties per year by providing quicker, detailed troubleshooting, resulting in reduced mean time to repair and a higher quality of service

The scenario assumes that a single SLA penalty averages

$1,250 and assumes that without the solution from ADC and EXFO in place, half of all locations will receive an SLA payment once per year

The scenario assumes that this solution will reduce the number of SLA penalties by 25% This reduction in SLA penalties adds up to significant savings over five years— cumulative savings for all locations results in a SLA penalty cost avoidance exceeding $330,000 See page 9 for the detailed business case and associated charts

Other Savings and Benefits

There are other benefits not quantified in this ROI analysis that accrue to service providers that use the solution from ADC and EXFO The most prominent are:

• Increased customer adoption rate

• Expanded market potential through value-added services

• Increased customer retention

• SLA-based service upgrades

3 Light Reading, Feb 2004

Increased Customer Adoption Rate

The compelling features of Ethernet, such as incremental

bandwidth provisioning on demand, easy integration into

corporate LANs, and low equipment costs, attract

customer interest But before replacing legacy data

access, customers need to be convinced that Ethernet is

carrier-class By assuring network quality and availability

through remote testing practices, providers can increase

customer adoption by offering competitive SLAs with

Quality of Service (QoS) rivaling legacy access

technologies—but at a much lower cost

Expanded Market Potential through

Value-Added Services

Providers can increase revenues and market penetration

by offering premium services over Ethernet access links

By bundling services, an Ethernet offering becomes more

cost-effective and attractive to enterprise customers

These premium services include Voice over IP (VoIP),

videoconferencing, remote storage, and Virtual Private

LANs, all of which are experiencing significant growth

and command a premium over ‘dumb-pipe’ access

solutions Without an 802.3ah-compliant remote testing

solution assuring QoS, service providers that plan to

provide critical services frequently prefer to offer them

over legacy access technologies such as Frame Relay and

ATM, which are comparatively more expensive and

difficult to provision

Increased Customer Retention

Ethernet service offerings constitute a rapidly growing,

highly competitive market Poor service quality is the

principle reason customers switch service providers In

2004, providers experienced customer churn in Ethernet

services exceeded 20%4 Increased service quality

through remote testing can help to reduce this turnover

Assuming annual churn can be reduced by 10 percent

(from 1.8 percent per month to 1.5 percent per month),

the average customer relationship increases from 56

months to 67 months This translates into more revenue

and a higher return on initial acquisition and equipment

costs Also, with fewer customers canceling the service,

and the same number adopting the service, overall

market penetration will improve

SLA-based Service Upgrades

Customers with best-effort Ethernet services generate

less revenue than those upgraded to premium SLA-based

links Remote testing gives providers increased

confidence that premium SLAs can be maintained

without penalty As shown in the following chart, the

monthly cost increment to offer a premium SLA is much

less significant than the additional revenue which is generated Figures shown are based on estimated monthly Ethernet access services offered by Tier-1 U.S carriers

By persuading this customer to move from basic SLA to premium SLA, the service provider increases its revenue

By automating the move with the remote testing solution, the service provider incurs little additional cost

in upgrading the link

Summary

The remote Ethernet testing solution from ADC and EXFO consists of two components: ADC ENIUs installed

at remote locations to define the demarcation points between the provider and customer networks, and the complete Ethernet test suite using EXFO’s Packet Blazer This solution offers substantial benefits to service providers It can greatly reduce operational expenditures while increasing network availability and reliability Mean time to repair (MTTR), often a cornerstone of SLAs, can

be substantially reduced when the remote test solution is deployed

The solution can significantly reduce operational expenses In a scenario that examines savings for 400 locations, its reduction of truck rolls by 50% will result in

an estimated five-year cumulative OPEX savings of over

$640,000

It can also reduce the cost of SLA penalties by over 25% This reduction in SLA penalties adds up to significant savings When the numbers are calculated for the cumulative savings over a five-year period for 400 locations, it results in an total SLA cost avoidance exceeding $330,000

4 according to an independent study commissioned by Cisco in fall 2004

SLA Upgrade OPEX and Margins

0 500 1,000

3,000

4,000 3,500

2,000 2,500

1,500

Basic SLA Premium SLA

Margin OPEX

The solution also increases network availability and

reduces network downtime Because it can perform

single-ended testing, it enables faster service restoration

Through 802.3ah compatibility, it easily integrates into

existing operations by mirroring current maintenance

practices for legacy access technologies

The solution offers other benefits as well Because it can

help operators ensure competitive SLAs with premium

Quality of Service (QoS), service providers can attract new

customers, reduce customer turnover, and attract extra

revenue by selling higher-margin Ethernet services

Without the testing solution, service providers will

frequently encounter difficulties managing premium

services over Ethernet, often resorting to legacy access

technologies such as Frame Relay, SONET, and ATM,

which are comparably more expensive and difficult to

provision

All these benefits create a compelling case for remote

testing in first-mile Ethernet deployments By providing a

framework for competitive, scaleable Ethernet services,

the solution from ADC and EXFO can form a key element

in a service provider’s expansion into this profitable

market

Company Overviews

ADC and EXFO are partners in providing best-in-class

remote test solutions for Ethernet access networks ADC

and EXFO sales and support organizations provide

comprehensive global product and application support

Additional information about the joint-test solutions can

be found at www.adc.com and www.EXFO.com

About ADC

ADC provides the connections for wireline, wireless,

cable, and enterprise networks around the world ADC’s

innovative network infrastructure equipment and

professional services enable high-speed Internet, data,

video, and voice services to residential, business and

mobile subscribers ADC (NASDAQ: ADCT) has sales into

more than 100 countries Learn more about ADC at

www.adc.com

About EXFO

EXFO is a recognized test and measurement expert in the

global telecommunications industry through the design

and manufacture of advanced and innovative solutions as

well as best-in-class customer support The Telecom

Division, which represents the company’s main business

activity, offers fully integrated and complete test solutions

to network service providers, system vendors and

component manufacturers in approximately 70 countries

One of EXFO’s strongest competitive advantages is its PC/Windows-based modular platforms that host a wide range of tests across optical, physical, data and network layers, while maximizing technology reuse across several market segments The Photonics and Life Sciences Division mainly leverages core telecom technologies to offer value-added solutions in the life sciences, high-precision manufacturing and research sectors For more information about EXFO, visit www.exfo.com

Following is the detailed business case and associated charts:

Project Summary

Payback Period 16

(in months)

Cumulative $735,134

Net Value

Installation $38,880

Net Value

Net Present $578,881

Value

Payback Period 16

(in months)

5-Year Net Benefit = $735,134

34%

66%

Cumulative Net Benefit

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

($100,000) Year 1 Year 2 Year 3 Year 4 Year 5

$0