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Five Reasons to Adopt Layer 2Ethernet Switching OverDWDM Networks Now

A white paper issued by:

Siemens

Networks

Dr. Hans-Juergen Schmidtke, VP of Optical Transport

Alan Gibbemeyer, Director, Next Generation Networks BU

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A Metro

Ethernet

Forum (MEF)

study

suggests that

an Ethernet-

over-optical

network costs

about half as

much to

operate as a

legacy

SONET/SDH

one.

Executive Summary

A new network is emerging for delivering media-rich and bandwidth-hungry content,

applications and services. Traditional SONET (Synchronous Optical NETwork)/SDH

(Synchronous Digital Hierarchy) architectures, developed for the narrowband world of a

generation ago, are overloaded. Such practices as stacking SONET/SDH rings to

increase capacity are complex and costly, while Ethernet-over-SONET/SDH protocol

conversions waste tremendous bandwidth.

With data traffic exploding and now dwarfing the Time Division Multiplexing (TDM)-based

demands, a move to pure packet-based transport over Dense Wavelength Division

Multiplexing (DWDM) has significant economic benefit by avoiding packet to TDM

conversions at each node. In addition, newer protocols such as Gigabit Ethernet (GigE),

10GigE and Fibre Channel are coming forward alongside advances in smart DWDM

technology.

Together, these advances offer increased flexibility, reduced operational complexity and

lower equipment costs compared with todays widespread SONET/SDH infrastructure. In

fact, a Metro Ethernet Forum (MEF) study suggests that an Ethernetover-optical

network costs about half as much to operate as a legacy SONET/SDH one.

Aside from its high bandwidth capacity, DWDMs key advantages are its ability to easily

transport these newer data protocols and effectively collapse current network overlays by

eliminating optical-electrical-optical (O-E-O) conversions. OEO conversions are the

major cost drivers in todays transport network, both in terms of investment CAPEX, as

well as the long-run operational costs. From a topology and service delivery point of view,

meshed capable Ethernet and meshed DWDM layer is the perfect match.

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This paper identifies five compelling reasons service providers should consider

implementing Layer 2 Ethernet Switching over DWDM now:

1. Eliminate Network Layers While Reducing Complexities and EquipmentCosts

2. Improve Resource Use to Achieve Optimal Bandwidth Efficiency

3. Simplify End-to-End Provisioning to Speed Time to Market

4. Automate Network Management for Scalability and Reduced Operating

Expenses

5. Detect Problems Automatically and Resolve Them Faster Across the EntireNetwork

By combining packet-processing intelligence and optical-wavelength assignment into a

single, unified system e.g., Layer 2 Ethernet Switching over DWDM service providers

can achieve significant operational savings, make better use of their resources, achieve

optimal bandwidth efficiency and gain nearly limitless scalability. These advantages make

a business case for DWDM especially compelling for metro and regional applications,

and for network operators who may have considered DWDM solely a long-haul transport

technology.

In effect, the price-performance of Layer 2 Ethernet Switching over DWDM can help

service providers deliver content, services, and applications more cost-effectively, while

sharpening their competitive edge and reducing customer churn.

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Table of Contents

1. Situation Analysis ................................................................................................62. Five Reasons to Adopt Layer 2 Switching Over DWDM.................................10

#1:Eliminate Network Layers While Reducing Complexities and EquipmentCosts ..............................................................................................................11

#2: Improve Resource Use to Achieve Optimal Bandwidth Efficiency ................12#3:Simplify End-to-End Provisioning to Speed Time to Market ..........................13#4:Automate Network Management for Scalability and Reduced Operating

Expenses .......................................................................................................15#5:Detect Problems Automatically and Resolve Them Faster Across the Entire

Network ..........................................................................................................163. Conclusion ..........................................................................................................164. Abbreviations and Acronyms............................................................................18

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1. Situation Analysis

A dynamic market shift is taking place toward a much richer and increasingly

personalized everything-on-demand information, communications, and entertainment

environment. Fully realized, this environment will enable consumers and businesses to

access whatever content, applications, and services they want whenever and wherever

they want them.

So what do they want? New and exciting IP-based content, applications and services

such as IPTV (Internet Protocol TV); Video on Demand (VOD); triple-play voice, data and

video; the so-called smart home; 3G/mobility; IP video telephony; multi-player network-

based gaming and more.

Ethernet on the rise

Of course, all this generates packet traffic Ethernet, more and more that needs

massive and independently scalable real-time ingest and streaming capabilities, along

with colossal storage capacities. Plus, it needs ingest and streaming to be separated for

the sake of efficiency and Quality of Service (QoS) / Quality of Experience (QoE)

guarantees.

In response, service providers are building out their metro and regional networks to

handle todays demands while both supporting legacy TDM services and keeping an eye

on tomorrows needs. Service providers have quickly realized the legacy technologies in

todays Metro Area Networks (MANs) lack the dynamic functionality and scalability to

handle the ever-increasing bandwidth demands from the access network at the requisite

QoS / QoE level.

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The challenge

that service

providers are

faced with is

finding the

right carrier-

grade networkelements or

building

blocks that

offer cost-

efficiency,

simplified

operations and

scalability to

meet theexponentially

increasing

bandwidth

demands

resulting from

the adoption

of these new

services.

These new IP-based services and applications require a flexible transport infrastructure

to handle their unique network demands and requirements. For example, they require

massive real-time ingest capabilities as well as the separation and independent scaling of

streaming/ingest and storage capacity.

The challenge that service providers are faced with is finding the right carrier-grade

network elements or building blocks that offer cost-efficiency, simplified operations and

scalability to meet the exponentially increasing bandwidth demands resulting from the

adoption of these new services. Operators have to figure out how to cost-effectively

move these multiple-service offerings without compromising operational efficiency.

DWDM on the march

In order to remain competitive today, service providers need to move away from legacy

transport networks such as SONET/SDH and Frame Relay toward highly reliable and

intelligent DWDM networks. DWDM transport networks reduce fiber requirements by

unlocking the embedded capacity of existing fiber infrastructures. The idea is to use fiber

- not to transmit signals just on a single wavelength - but to convey them through the

same fiber over multiple wavelengths to better utilize almost unlimited fiber-optic

capacity.

After a long period of stagnation and decline in the last years, demand for optical

equipment is now rapidly accelerating again as service providers around the world have

begun to consume the excess network capacity that resulted from the massive network

expansion they began in the mid-1990s, and are starting projects to leverage recent

technological advances to deliver on the promise of everything-on-demand and the

increasingly high-definition, personalized TV.

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Even service

providers who

traditionally

did not need

DWDM

networks

should

consider them

today in order

to deliver

these new,

media-rich

content,

applications,

and services

in a cost-

effective and

reliable way.

The next graph illustrates the continuous rapid sales growth of Wave Division

Multiplexing gear in North America from the latest Infonetics Research.

North Am erica Metro WDM Revenue(USD Million)*

-

100

200

300

400

500

600

700

CY 2003 CY 2004 CY 2005

*Source: Infonetics Research

The reason for this strong growth is that DWDM offers greater transport and

operational efficiencies. Because of its bit-rate and protocol-independent nature,

service providers can collapse current overlays and seamlessly support the

increasingly ubiquitous newer low-cost protocols, such as GigE and 10 GigE, in their

native formats. Even service providers who traditionally did not need DWDM networks

should consider them today in order to deliver these new, media-rich content,

applications, and services in a cost-effective and reliable way. Otherwise, they risk

their ability to play in this new world of everything on demand and personalized user

experiences.

A DWDM network, when combined with Layer 2 Ethernet switches, enables service

providers to achieve operational efficiencies and savings while also positioning

themselves for future revenue-generating services.

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The cost savings of a DWDM network, when combined with GigE and wire-speed Layer 2

Ethernet switches, are significant. According to a Metro Ethernet Forum (MEF) study

based on a three-year build-out of a medium-sized metro area network, a network based

on optical Ethernet design principles costs 49 percent less to operate than a legacy

SONET/SDH-based network.1

From the network economics analysis that Siemens has performed to date, we estimate

the capital savings potential of L2 Ethernet over DWDM to be approximately 40-45

percent, assuming that 20 percent of the cost is attributed to access and 80 percent to

core optics. A recent detailed study suggested that 70 percent capital savings is possible

when Carrier Ethernet replaces legacy ATM access networks.

Capital expenditure savings when an automated DWDM replacesa legacy transport network.

On the optical core side, about 30 percent in capital savings can be realized when an

automated DWDM regime replaces a legacy transport network. The savings come from

1Billing World and OSS Today, January 2006, Metro Ethernet Finally Delivers.

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reduced optical-electrical-optical (O-E-O) conversion plus the initial build capital reduction

due to future-proof and scalable network design. On top of the capital savings, human

effort is also reduced for service provisioning and operations, resulting in an up to 80

percent savings of operational expenses over time.

In addition, significant technology advancements are occurring in the areas of intelligent

optical DWDM line systems. These include systems incorporating ROADMs

(Reconfigurable Optical Add-Drop Multiplexers), which more than make up for their cost

by eliminating the need for costly O-E-O conversions, and even PXCs (Photonic Cross

Connect) that enable a transparent optical mesh architecture. Another big advancement

comes from distributed control mechanisms like Generalized Multi-protocol Label

Switching (GMPLS) that help provide intelligent management of data capacity and

throughput. Together these innovations can provide increased flexibility, reduced

operational complexity, and lower equipment costs through the reduction of DWDM

transport network components.

A completely integrated network employing Layer 2 Ethernet Switching over DWDM

allows for dynamic data capacity and throughput sharing/distribution across multiple

server ports, blades and complexes. This results in an inherently more reliable and

scalable system able to handle tomorrows ever-growing bandwidth demands most cost

effectively.

2. Five Reasons to Adopt Layer 2 Switching Over DWDM

Whether networks are TDM-based or packet-based, Layer 2 Ethernet switching can be

integrated with DWDM optical transport systems to cut costs, make better use of network

resources and provide simple end-to-end provisioning.

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Although there are many reasons to adopt Layer 2 Ethernet Switching over DWDM, the

top five most compelling reasons why service providers should consider deploying this

next generation optical network technology today are as follows:

#1: Eliminate Network Layers While Reducing Complexities and EquipmentCosts

A DWDM optical transport network can extend from the core to the edge and access

networks. ROADMs can eliminate the complex O-E-O layer, thereby reducing the number

of network elements. For example, traffic that needs switching or routing can be dropped

to an appropriate device while traffic that does not benefit from a sub-lambda packet

processing can be optically switched. In effect, this collapsing of the optical network

layers dramatically reduces network complexities and operating costs.

Now add to that carrier-grade Layer 2 Ethernet for transport, aggregation, and switching.

Carrier Ethernet has proven to reduce costs in terms of capital expenses as well as

operating expenses without compromising the availability of the delivered services and

QoS. Especially effective is this packet-based technology, due to the fact that the next

generation network applications are typically native packet-based applications. A costly

transformation from packet to TDM and back is being avoided and a full layer of

transformation is eliminated.

For example, putting carrier-grade Ethernet over DWDM allows for a very cost-optimized

solution, such as the ideal placement of aggregation and grooming sites to share the

resources in the optical and electrical layers, minimizing wavelength usage. Again, it

requires less network elements and therefore is much easier to manage and operate.

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In addition, a collapsed Layer 2 Ethernet over DWDM network uses less power, less rack

space and offers very high scalability at a much lower cost than traditional TDM-based

networks.

#2: Improve Resource Use to Achieve Optimal Bandwidth Efficiency

A fully integrated Layer 2 Ethernet over DWDM network can adapt to varying traffic

demands and provide per-flow protection without packet restrictions necessary

requirements for a multi-service environment.

By combining the packet-processing intelligence and optical-wavelength assignment into

a single system, effectively collapsing the network, service providers can avoid excessive

inventory as well as the restrictions imposed by per-port protection. An integrated Layer

2 over DWDM network allows these services to be separated, and then protected

differently. The end result is a cost-effective system that makes better use of its

resources. A two-system architecture (illustrated below) would require the flows to be

broken up according to service level, resulting in underutilized ports. The key, again, is

creating the optimal mix of port protection and mix of QoS supported on a single system.

Siemens March 2006 8

OSI-Layer

Collapsing of layers and technologies: L2 over DWDM

DWDM DWDML0/L1

L2

L3

L4

ULH / Regional Core Access

Content

Business

L5-L7

Residentia

IP VPN, IP VPLS

Ethernet as service and

transport technology

Unified optical network layer

Ethernet is a very cost-effective andperformance optimized solution

A two-system DWDM network with Ethernet as a transport technology.

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However, a collapsed network (illustrated below) overcomes the two-shelf restrictions

and aggregates the flow directly into the DWDM optical transport wavelengths to optimize

bandwidth efficiency and costs.

Siemens March 2006 9BusinessO

SI-Layer

Collapsing of layers and technologies: L2 over DWDM

DWDM DWDM

L1

L2

L3

L

4

ULH / Regional Core Access

Content

Business

L5-L7

Residentia

Ethernet as transport technologyfor content delivery

A collapsed Layer 2 over DWDM Network always transports dataon the lowest possible layer.

A regional or core network with Layer 2 Ethernet over DWDM can benefit by keeping

within the optical layer those wavelengths that don't require LER/LSR routing while traffic

requiring LSR is dropped out to a "switching" portion of the DWDM system. This means,

only traffic that requires switching leaves the optical layer a significant savings in both

capital and operational expenses.

#3: Simplify End-to-End Provisioning to Speed Time to Market

Service providers require highly automated optical systems in order to provision new

services, troubleshoot quickly, and add capacity as needed. Thats why simple, easy-to-

use tools that provide automated end-to-end provisioning are so valuable. An ideal

solution, for example, would deliver one software control platform for easy and fast end-

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With a

simplified end-

to-end

provisioning

system,

service

providers can

offer the

highest

serviceavailability to

increase

customer

satisfaction

and reduce

churn, while

achieving

record-setting,

time-to-market

goals with new

services.

to-end provisioning from network planning to the final step of verifying a Service Level

Agreement (SLA), offering minimal fault-prone human intervention.

With a collapsed network, planning and configuration tools are linked via software

interfaces to make sure the link is installed exactly as planned. Work orders are issued

automatically and sent from the network manager down to the network elements.

Reconfiguration or installation of new channels is done continuously within the software

suite while SLA data can be monitored and logged automatically and verified via the

network.

Page 1 August-06

Customer request

Example of ease of use HiT 7300 can provision a new wavelength by noon

Faster time to market, faster return on investment

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#4: Automate Network Management for Scalability and Reduced OperatingExpenses

A single, automated network management system within a Layer 2 Ethernet over DWDM

network can provide full support for all management tasks from the element layer to the

service layer, as well as an overall network view of the complete next generation optical

network.

The system should be able to scale within wide limits to provide customized and cost-

optimized network management solutions. This pay-as-you-grow concept allows

operators to start with a cost-effective system and gradually add more growth as the

network demand increases.

It should also support the new generation Multi-service Provisioning Platform (MSPP)

networks, and should be flexible enough to stand alone or be integrated into the NMS

(Network Management System), thus providing a seamless extension of the existing

management network.

In order to support SONET and SDH interfaces, TDM circuit emulation support is

required. Data layer management Layer 2 switches, for example Virtual Local Area

Networks (VLANs) or Resilient Packet Ring (RPR) networks are handled within a single

network management platform.

By supporting open and standard interfaces, the network management system can be

integrated into virtually any high or low-level management system, allowing for further

reduction in operating expenses.

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#5: Detect Problems Automatically and Resolve Them Faster Across the EntireNetwork

With a Layer 2 Ethernet over DWDM network, a much higher resiliency and drastically

simplified operations can be achieved. An integrated solution can support very intelligent

protection mechanisms with shared protection over different OSI layers.

In addition, enhanced alarm correlation and troubleshooting simplify the network-level for

root-cause determination and problem resolution across the entire DWDM network. For

example, a dropped signal typically causes alarms to go off everywhere in the network

across amplifiers, multiplexers, transponders, and other network elements. A collapsed

network is able to correlate and isolate the problem to the direct source much faster,

eliminating unnecessary alarms in the network and resolving problems more quickly. It

also immediately pinpoints critical issues with powerful alarm logging, alarm filtering,

repetitive alarm suppression, and intelligent root-cause alarm correlation functions across

packet and optical domains.

3. Conclusion

The industry is rapidly moving toward a bandwidth-intensive, multi-service world; and with

service providers increasingly reaching their network capacity, they are struggling with

how to cost-effectively deliver on the promise of these new services and applications

without compromising operational efficiency.

Over the past five years, many service providers have deployed DWDM networks as the

underlying and enabling Layer 0/1 optical technology, which lets them collapse current

overlays and easily support new low-cost protocols, such as GigE/10 GigE and Fibre

Channel, in their native formats.

While it may seem obvious that the network demand is moving to Layer 2 or IP over

DWDM, there are problems in network migration for service providers. Circuit emulation

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with Ethernet/IP transport or overlay packet and TDM with TDM as the transport

technology are the two main options available to maintain legacy services. The tendency

is moving toward circuit emulation for the best economic solution.

The DWDM transport network, combined with Layer 2 Ethernet switching allows for

unprecedented dynamic data capacity and throughput sharing and distribution across

multiple ports, blades and complexes, and drastically improved resiliency and availability.

The Layer 2 Ethernet packet switch technology is especially optimized for the next

generation network traffic that is dominantly and natively packet-based.

These capabilities enable service providers to drastically cut equipment and operational

costs; reduce complexities in the network by eliminating/collapsing layers within the

network; make better use of network resources to achieve optimal bandwidth efficiency;

offer the highest service availability through a single-automated network management

approach that gives an overall view of the complete next generation optical network; and

easily scale to handle tomorrows nearly limitless bandwidth demands.

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4. Abbreviations and Acronyms

CAPEX Capital Expenditures

DCC Data Communications Channel

DWDM Dense Wavelength Division Multiplexing

GigE Gigabit Ethernet

GMPLS Generalized Multi-protocol Label Switching

IP Internet Protocol

IPTV Internet Protocol TV

LER Label Edge Router

LSR Label Switched Router

MAN Metro Area Network

MEF Metro Ethernet Forum

MSPP Multi-service Provisioning Platform

NMS Network Management System

O-E-O Optical in Electrical processing Optical out

OPEX Operational Expenditures

PXC Photonic Cross Connect

QoS Quality of Service

QoE Quality of Experience

RPR Resilient Packet Ring

ROADM Reconfigurable Optical Add-Drop Multiplexer

SDH Synchronous Digital Hierarchy

SLA Service Level Agreement

SONET Synchronous Optical NETwork

TDM Time Division Multiplexing

TNMS Telecommunications Management System

VLAN Virtual Local Area Network

VOD Video on Demand

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Appendix: The Siemens

Family of Integrated Layer 2 over DWDM Products

The Siemens family of integrated Layer 2 switching over DWDM products are based on

Siemens' SURPASSTransparent Optical Networks solution (including the SURPASS

hiT 7300 and SURPASS hiD 6630/50/70 series DWDM platforms, and the TNMS network

management system), enabling the roll-out of high-bandwidth, flexible, and scalable

networks.

Next Generation Multi-haul DWDM Platform SURPASS hiT 7300

The SURPASS hiT 7300 is a flexible and cost-efficient 40-channel DWDM transportplatform optimized for high-capacity transport within regional and long-haul networks. Itis designed and optimized for bit rates of 2.5 Gbit/s, 10 Gbit/s and 40 Gbit/s perwavelength. SURPASS hiT 7300s key building blocks include terminal, optical linerepeaters, OADMs, and ROADMs that allow for tailored solutions for any kind of networksize and architecture. It offers a full range of transponders, enabling Ethernet (GigE and10 GigE), SAN, TDM and OTH services.

SURPASS hiT 7300 offers comprehensive automation and customization of networkhandling within one common DWDM platform, which drastically reduces operational costsand speeds return on investment. This next-generation multi-haul DWDM platform alsooffers a high degree of modularity, enabling an easily scalable, pay-as-you-grow strategyand guaranteeing a fast return on investment.

Carrier Ethernet Switches SURPASS hiD 6630/50/70 Series

The Carrier Ethernet switches platform the SURPASS hiD 6630/50/70 series isdesigned to meet the requirements of metro aggregation and metro core carrier gradenetworks. It includes industry-leading traffic management, enabling service providers tooffer revenue-generating quality services to their customers on a DWDM convergednetwork, backed by guaranteed SLA delivery. Siemens family of Carrier Ethernetswitches have been certified as compliant with specification 14 of the Metro EthernetForum.

Automated Network Management System TNMS (Telecommunications NetworkManagement System)

TNMS is the management system for next generation optics. It provides an easy-to-

understand overall network view and simple network navigation coupled with uniformfault, configuration and security, and performance management. The TNMS carries outall common management functions in the element, network, and service layer extremelyefficiently. By supporting open and standard interfaces, TNMS can be easily integratedinto different management network scenarios, allowing for further reduction in operatingexpenses. Its ergonomically designed and intuitive user interface creates a newdimension in operating convenience, resulting in higher efficiency, error-free routineoperations and reduced staff training time and lowering over all costs and operatingexpenses.