Easing Ethernet Sales

By Khali Henderson

In some ways Ethernet is a victim of its own success. Its higher-bandwidth, lower-cost mantra has business users salivating and service providers of every ilk scrambling to feed the frenzy. The gigabit gold rush has fashioned a mixed marketplace with a jumble of offers, making it difficult for businesses to evaluate a migration from legacy ATM and frame relay WAN technologies. This creates an opportunity for channel partners that can break through the clutter.

The bottom line, folks, is that for the next 10 years and beyond, this will be the core last-mile access technology for all businesses.

The need for speed is only going to increase, said Joc Jacquay, senior vice president of sales and marketing, AboveNet Inc., in a Webinar produced by PHONE+ last fall (visit www.phoneplusmag.com/webinars). If you are going to survive in the sales world you are going to need to get them on a migration path to an Ethernet service that is right for them.

The buzz around carrier Ethernet is understandable. Ethernet is highly scalable, extending from megabit to gigabit speeds to accommodate growing bandwidth demand for typical WAN applications like site-to-site connectivity and Internet access, as well as even more bandwidth-hogging ones like video, medical imaging and others. In addition, Ethernet offers the flexibility to order incremental bandwidth in much more granular chunks than is available with circuits. These alone are attractive traits, but they are shored up by the fact that Ethernet is a familiar and simple network technology invented in the 70s for data communications in the local area network and that its ubiquity in the LAN gives it a lower cost basis than other technologies. Research firm Frost & Sullivan says Ethernet offers enterprises savings of up to 50 percent.

Sounds good? You bet. It sounds so good that a majority of enterprises still using legacy WAN services, such as ATM and frame relay, planned to migrate to next-generation services such as carrier Ethernet within the next two years, according to a survey published in mid-October 2007 by Current Analysis Inc.

Naturally, part of this shift is coming as corporations exceed the capacity limits of their legacy networks. In Current Analysis poll, enterprises also cited the opportunity to converge voice, video and data services as a driver.

As a result of this promise, worldwide revenue for business Ethernet services is projected to climb to $30.7 billion by 2012, according to Vertical Systems Group Inc.s latest market analysis, published in October 2007 (see chart below). Because of this vast opportunity, the number of providers specifically addressing the business Ethernet market is expanding. In its report on the segment for midyear 2007, Vertical Systems Group says competition in the business Ethernet services market heated up during the first half of the year. The dense availability of low-cost metro services boosted share for many regional U.S. Ethernet providers. Competitors to the ILECs, such as AboveNet Inc., Time Warner Telecom, Level 3 Communications Inc., Yipes and others, have captured more than 60 percent of the market.

Along with an increasingly competitive market comes a variety of offers, making it difficult for enterprises to evaluate Ethernet as an alternative to their legacy services. As an example of this uncertainty, a recent survey by Vertical Systems Group shows nearly half (46 percent) of enterprise network decision makers dont know how pricing for business Ethernet compares to their existing network services.

They know they want speed, they know they want bandwidth, they know they want reliability, security and low latency, said AboveNets Jacquay during his Webinar presentation. You have to work with them to find out which Ethernet network is best for them and for their application.

One of the primary differences among networks is whether its shared or dedicated. Typically a shared infrastructure aggregates all building traffic in a basement switch, which is then routed through a variety of ILEC COs to the customers branch offices while a private solution at least in AboveNets case is end-to-end fiber dedicated to one customer. In order to determine which might be better, agents have to understand how much bandwidth the customer needs and the importance of low latency and scalability. Jacquay, not surprisingly, argues that latency-sensitive applications may suffer on shared infrastructure due to the number of hops and patch panels the traffic is routed through. Ethernet over a SONET-based infrastructure can mitigate this possibility, but he says if planned growth is substantial, relying on shared infrastructure could be risky as multiple tenants vie for the same bandwidth, creating contention and dropped packets. To be honest if they are at 5mbps and want to grow to 10, dedicated is not for them, says Jacquay. A dedicated solution is for customers who are at 100 and looking to grow to a gigabit.

In addition to these architecture types, Ethernet traverses a range of media fiber, copper and wireless. Additionally, Ethernet can be run natively, or it can be run over SONET or its predecessor PdH (the timing structure used for T1/E1 and T3/E3 circuits). In part, this is good news, since not all buildings and especially branch offices prospects occupy are fiber-fed. However, it complicates setting up Ethernet networks since different speeds and classes of service may accompany each. Furthermore, it can require a multicarrier approach. For agents new to selling Ethernet, this can be a daunting task and they may prefer to rely on the carrier to secure access to facilities that are not on-net; or, for the bigger customers, have dedicated facilities built by a fiber provider, such as AboveNet or FiberLight LLC.

All these choices are well and good, but figuring out which ones are available to which prospects or customers is no easy task. Qualifying a prospect is complicated by the carriers not providing network maps and lists of lit buildings, says Patrick Oborn, cofounder and vice president of marketing for Telarus Inc., a master agency know for its ShopforT1.com lead-generation partner program. He explains that not having this info means agents blanket their provider pools with quote requests, which frustrates the carriers, especially when they dont have network to support the deal. To solve this problem, Oborn says Telarus has created a tool called ShopforEthernet.com that enables agents to target their quote requests (see screenshots). Launched in August 2007, the application takes advantage of Google Maps and carrier-supplied lit building lists to automate customer qualification. A customer-facing site shows the distance to a network, but does not identify the provider and prompts users to enter info to get a quote. These leads go to Telarus agents, who can use the tool to see detail on the available providers and the types of circuits they are offering. A quote request can be kicked off to the carrier automatically from the availability list.

Agent David Leach, owner of Carrier Consultants, began using the tool right away. In the past four months, he quoted a dozen deals and closed three using the ShopforEthernet.com back office. The real secret is having it all at your fingertips knowing who the players are and being able to get pricing from them, he said, noting the tool eliminates steps in the quoting process and it also puts all the information needed to work leads in one place. In 20 years, its the tightest program Ive seen, says Leach of ShopforEthernet.com and the ShopforT1.com back-office system. It makes my life easy.

Putting it together was not so easy for Telarus, however. Its been a technical challenge (standardizing addresses on Google Maps), but its also been a very political red-tape-intensive challenge [to get the information], says Oborn, noting some carriers are concerned about the security of their network data its loss to a competitor or to saboteurs. Oborn says these fears are unfounded since agents are prevented from mining the database because it delivers quotes on a one-off basis and an auto shut-off is triggered if too many quotes are kicked off. The big companies, they see more downside than upside [to releasing the data], and thats another challenge is to make them realize that their upside by exposing agents to this information and not just legal risk.

So far, ShopforEthernet.com includes Cavalier Telephone LLC, Telnes Broadband, Level 3, NuVox Communications, MegaPath Inc., Time Warner Telecom and XO Communications Inc., but the company is working on others. Oborn says Ethernet sales are picking up exponentially, admittedly from a handful of deployments before the site launched. Were hoping to have our Ethernet-based network sales to be equal to our TDM-based network sales so all of T1 and DS3 together, he says, noting within the next 12 months, he expects it to grow to be at least half Telarus business.

In addition, Oborn says that carriers that participate also get feedback that is useful to their infrastructure building plans. Level 3, for example, is including its fiber routes in the database, so that agents can let them know about nearby buildings with potential tenants they could build to.

Aside from the ShopforEthernet supporters, there are other carriers trying to make Ethernet sales easier for customers and agents. AboveNet offers agents a triple threat of tools that includes network maps, lit building lists and real-time pricing tools, says Justin Puccio, president and founder of Satori Networks Inc., a master agency selling AboveNets services for the past two years.

In addition, FiberLight is set to launch a formal partner program and has tapped Ray Potts, formerly a channel exec from Intelliverse, to make it happen. As vice president of the agent channel, Potts is charged with building the program that has heretofore been ad hoc. The company recently announced a deal with agency NEF Inc., which specializes in big bandwidth sales (see PHONE+ October cover story). Besides NEF, there are a handful of indirect sales partners, Potts says. Potts says FiberLight in January 2007 began targeting enterprises with its LightSource service, which is a fully managed fiber offering the company rolled out to carriers in fall 2005. The company is counting on agents to get LightSource into the enterprise. The service is available today in 14 cities and metro areas. details about the new agent program were expected to be released in first quarter. However, Potts says his goal is to make it easier to sell Ethernet by providing agents with information, such as pricing comparisons with legacy services. In addition, he will institute boot-camp-style training and weekly updates for new recruits.

Looking for More?

Find out about how Ethernet in the first mile (EFM) is fast becoming the T1 and DS3 alternative in a session featuring top Ethernet carriers at the Spring 2008 Channel Partners Conference & Expo in Las Vegas. www.channelpartnersconference.com