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ATM, IP, and Broadband Switching: Routers and Broadband Switches Powering
Access, Metro, and Backbone Networks
2001-2006
a market research report
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With access demand expected to grow 25% worldwide over the next five years, carriers are asking vendors to come up with protocol-agnostic edge switches or routers able to take on IP, ATM, or any other type of data stream. On the backbone, outfits like Sprint and AT&T have capped their investment in TDM circuit switches. Vendors are promising a next-generation converged switch, yet when they position their products with carriers they attempt to maintain an edge or core distinction which belies true next gen performance and interface requirements.
This report looks at the impact that new vendors and architectures are having on the normally staid switching world. A new generation of equipment is being developed that will remake the economics of communications in the decade ahead, and this study will help you anticipate those changes.
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Report Excerpt
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Background
It will be said a few years from now that it was not really a capacity glut that brought the telecommunications market to its knees by mid-2001. What led to massive layoffs, fantastic asset write-downs among established vendors, and a seemingly endless stream of bankruptcy proceedings among new entrants was the
industry's inability to quickly transition to a business model oriented around data and the investment
community's inability to distinguish between long-term capital asset investments (telecom) and short-term market development expenses (dot com).
In the heyday of what is even now being called a telecom bubble, the
historically profitable voice telephone business was being viewed
dismissively for its low growth while competition in the long distance
segment underscored the argument by driving margins ever lower. At the same
time, data traffic volumes grew spectacularly off of the back of residential
consumers' love affair with the Internet,
but consumers were generally not willing to pay for anything beyond a second line for Internet access.
Profitable end-user revenue is the only truly reliable source of funds for
telecom service providers, and eventually Wall Street figured out that
end-user revenue from dot coms was not going to be rolling in any time soon. Seemingly overnight, the plug was pulled on the dot coms and everything else Internet-related, including telecom. The problem facing the telecom industry today is that the current scarcity of capital funding is starting to put limits on the expansion of the very facilities which will engender future revenue growth for data communications in all its aspects.
Insight is forecasting that traffic will continue to double every 12 months,
even taking into account downward bumps from the current telecom recession. By 2006, data traffic will exceed 1018 bits per day or 60 Tbit/s of busy hour traffic.
If we assume that the current average of 17 hops per Internet connection and the same provisioning practices will continue, the aggregate required switch capacity will be over 6,000 Tbit/s by 2006. Insight expects the number of broadband switches to almost triple, at the same time the throughput capacity per switch will increase by a factor of 25. Essentially all of the switches in 2006 will be new (except for ATMs which will be moved to downward to continue to provide legacy services). These new switches will account for an aggregate investment of almost $50 billion. Something has got to change,
either Wall Street analysts need to begin taking lithium to get past their current fierce mood swings about telecommunications or the Internet will start to grind to a halt.
Defining Broadband Switching
A broadband switch, as the term is used in our study, is a switch/router which interconnects multiple transmission paths with at least some paths operating at rates of over one Gbit/s. Broadband switches come in a wide variety, from the terabit routers at the highest throughput level, down to the edge and service routers attached to the access network.
Transport devices, such as true optical cross-connects (OXCs) at the high end and optical add/drop multiplexers (OADMs) at the lower levels, are usually colocated with broadband switches. The number of transport devices that need to be installed is almost identical to the number of broadband switches required.
The Network in 2006
When we try to imagine what the network will look like in 2006, we foresee substantial demand for increased transmission capacity in all network links. The primary switching equipment in the major hubs within the core will be a combination of optical cross-connects with a thousand or more duplex ports and a terabit router. The secondary hub equipment will also be an optical switch/multi-gigabit router pair, but with a lower total throughput capability. While the migration of broadband switches to Internet protocol (IP), and the colocation of transport elements such as OADMs and OXCs with these switches is clear, what may not be currently recognized is that such arrangements may, in fact, give rise to new circuit-switched broadband services.
By 2006 most of the ATM and time division multiplexing (TDM) switches being used in 2000 will still be in service, but few new ones will have been added. These switches will continue to provide voice and frame relay/ATM service and will use wavelengths for transmission over an optical core network. The network management capabilities provided by ATM will be supplanted by multiprotocol label switching (MPLS) and its extensions into what might be called a Layer 2.5 network. The current gigabit and lower-speed routers will be pushed toward the edge of the network, but this shift will usually occur logically rather than physically.
Market Forecast
Insight predicts that the number of places where broadband switches are used will grow slowly and steadily between 2000 and 2006. At the same time, the average throughput per switch will increase at a much faster rate. As a result, networks will handle a much higher aggregate bandwidth by 2006.
In large secondary hubs or POPs, switches are often used for multiple applications. While this arrangement is economically attractive, it tends to compromise one or more of the functions. Functional integration is the normal progression in the industry, but it appears less likely to be implemented with broadband switches.
The revenue from the sale of broadband switches to handle the growing amount of traffic will increase to nearly $15 billion by 2006. Essentially none of the presently installed switches will still be in service in five years, though some will have been reassigned within the network during this period to perform different functions.
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Market Segmentation
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(All data 2001-2006 except where noted below.)
US Premises Access Lines
Switched Premises Access Lines
Special Premises (Private) Access Lines
US Peak Time Data Traffic Demand
Residential
Small Enterprise
Large Enterprise
Peak Enterprise
Peak '25% Residential
US Aggregate Switch Throughput Demand for Data Traffic
Network Switches Only
Rest of Switches
Bandwidth of US End-User Data Connections, 2000 and 2006
Switched Access
ISDN
xDSL
Cable Modem
Wireless-Switched
Private Line ¡Ý1 Mbit/s
Average Bandwidth
US Aggregated Bandwidth of End-User Data Connections, 2000 and 2006
Switched Access
ISDN
xDSL
Cable Modem
Wireless-Switched
Private Line ¡Ý1 Mbit/s
US Access-to-Metro Point Connections, 2000 and 2006
ILEC COs - Largest 20%
ILEC COs - Smallest 80%
Colocation Sites
Cable TV (Headends)
Wireless MTSOs
Number of Sites
Number of Connections Per Site
Total Number of Connections
Aggregate Throughput
US Metro Point-to-Core Data Network Connections, 2000 and 2006
ISPs - Largest 20%
ISPs - Smallest 80%
Sites
Incoming Connections
Per Site
Total
Outgoing Connections
Per Site
Total
Average Rate
Aggregate Throughputs
US Secondary Hub-to-Primary Hub Connections, 2000 and 2006
Secondary Hubs - Largest 20%
Secondary Hubs - Smallest 80%
Sites
Incoming Connections
Per Site
Total
Outgoing Connections
Per Site
Total
Average Rate
Aggregate Throughputs
US Primary Hub-to-Primary Hub Connections, 2000 and 2006
Secondary Hubs - Largest 20%
Secondary Hubs - Smallest 80%
Sites
Incoming Connections
Per Site
Total
Outgoing Connections
Per Site
Total
Average Rate
Aggregate Throughputs
US Broadband Switch Forecast, by Type of Switch, 2000 and 2006
Metro
Secondary Hub
Primary Hub
Size
Switch Function
Number of Locations
Number of Switches
Average Throughput per Switch
US Switch Port Forecast, 2000 and 2006
DS-3
OC-3
OC-12
OC-48
OC-192
OC-768
US Switch Throughput Forecast, 2000 and 2006
Demand
End-User Originated (Peak Time)
Network Switches (13 Hops, 12 Switches)
Rest of Switches
Total - All Switches (17 Hops, 16 Switches)
Supply
Network Switch Capacity (Aggregate Throughput)
Fill (% of Capacity Used During Busy Hours
Total Number of Broadband Switches in the US
Number of Switches
Average Throughput per Switch (Gbit/s)
Number of Ports
Average Number of Ports per Switch
US Broadband Switch Unit Sales Forecast
Access
Metro
Secondary Hub
Primary Hub
Size
Switch Function
Switch Type
Forecast of Revenue from Sales of Broadband Switches in the US
Access
Metro
Secondary Hub
Primary Hub
Size
Switch Function
Switch Type
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 Background
1.2 Defining Broadband Switching
1.2.1 Functions of Broadband Switches
1.3 The Network in 2006
1.4 Market Forecast
Chapter II
TELECOM NETWORKS
2.1 Networks & Their Changing Requirements
2.1.1 Network Sections
2.1.2 Network Topologies
2.2 The PSTN
2.2.1 Changes in PSTN by 2006
2.2.2 Changes in Central Offices
2.3 Data Networks
2.3.1 The Internet
2.3.2 Data Core Networks
2.3.2.1 Changes in Data Core Networks by 2006
2.3.3 Data Metro Networks
2.3.4 Data Access Networks
2.3.5 Signaling and Support Structures for Data Networks
2.3.5.1 Support Infrastructure
2.3.5.2 Changes in Protocols
2.4 Enterprise Networks
2.4.1 Changes in Enterprise Data Networks
Chapter III
FORCES AFFECTING THE BROADBAND SWITCH MARKET
3.1 Driving Forces
3.1.1 Growth of Traffic Volume
3.1.2 Growth of Network Users
3.1.3 Growth of Network Nodes
3.1.4 Growth of Applications
3.2 Inhibiting Forces
3.2.1 Shrinking Sources of Funds
3.2.2 Carriers Reducing Capital Expenditures and Expenses
3.2.3 Installed Base of Equipment
3.2.4 Lack of Standards
3.2.5 Personnel
3.3 Technology
3.3.1 Switch Architecture
3.3.1.1 Line Cards
3.3.1.2 Switch Fabric
3.3.1.3 Switch Controller
3.3.1.4 Route Processor
3.3.1.5 Forwarding Information Base
3.3.1.6 Interface to an External Signaling Network
3.3.1.7 Parallel and Distributed Operations
3.3.2 Signaling and Control
3.3.2.1 SS7
3.3.2.2 SONET
3.3.2.3 Frame Relay
3.3.2.4 ATM
3.3.2.5 Internet Protocol
3.3.2.6 Multi-Protocol Label Switching
3.3.2.7 Ethernet
3.3.3 Optical Transmissions
3.3.4 Access Technologies
3.3.4.1 Copper Pairs
3.3.4.2 Cable Modems
3.3.4.3 Optical Fibers
3.3.5 Chip Technologies
Chapter IV
BROADBAND SWITCH FUNCTIONS
4.1 New & Old Technologies in Telecom Networks
4.2 Technical Distinctions between Types of Switches
4.2.1 Throughput
4.2.2 Number of Ports Switches Handle
4.2.3 Pass-Through Capacity
4.2.4 Handling of Multiple Protocols
4.2.5 Multiplexing Function
4.2.6 Switch Fabric Granularity
4.2.7 Service Features of Switches
4.3 Functional Distinctions between Types of Switches
4.3.1 Optical ADMs
4.3.2 Edge Routers
4.3.3 Service Routers
4.3.4 ATM Switches
4.3.5 Multi-Gigabit Routers
4.3.6 Terabit Routers
4.3.7 Optical Switches
4.3.8 Optical Cross-Connects
Chapter V
BROADBAND SWITCH VENDORS AND THEIR PRODUCTS
5.1
Telcos' Cautious Attitudes Toward Vendors
5.1.1 Types of Broadband Switch Vendors
5.2 Broadband Switch Vendors with Wide Product Lines
5.2.1 Alcatel
5.2.2 Cisco Systems, Inc.
5.2.3 Lucent Technologies, Inc.
5.2.4 Nortel Networks Corp.
5.3 Vendors of Terabit Routers
5.4 Vendors of Multi-Gigabit Routers
5.5 Vendors of Optical Switches
5.6 Vendors of Service Routers
5.7 Vendors of ATM Switches
5.8 Vendors of Edge Routers
Chapter VI
MARKET FORECAST
6.1 Methodology & Definitions
6.2 Growth of Traffic and Interconnections
6.3 Growth of Telecom Services
6.4 Increase in US Data Traffic
6.4.1 Peak Traffic Forecast for US
6.4.2 Pattern of Traffic Movement in a Data Network
6.4.3 Switching Locations
6.5 Network Connections
6.5.1 Access Point-to-Metro Point Connections
6.5.1.1 Access Points
6.5.1.2 Number of Connections between Access and Metro Points
6.5.2 Metro Point-to-Core Network Connections
6.5.2.1 Number of Connections
6.5.3 Connections Between Core Network Secondary Hubs and Core Hub Sites
6.5.3.1 Number of Connections
6.5.4 Primary Hub-to-Primary Hub Connections
6.5.4.1 Number of Connections
6.5.5 Summary of Network Connections
6.6 Types of Switches in Network Locations
6.6.1 Equipment in the Access Points
6.6.2 Equipment in the Metro Point
6.6.3 Equipment in the Secondary Hub
6.6.4 Equipment in the Primary Hub Location
6.6.5 Broadband Switching Equipment Forecast
6.7 Summary of Forecast
6.7.1 Summary of Switch Forecast
6.7.2 Summary of Broadband Switch Inventory and Sales
6.7.3 Broadband Switch Revenue Forecast
Appendix
GLOSSARY
List of Terms
Table of Figures
Chapter I
I-1 Hierarchy of Broadband Switch Functions
I-2 Forecast of Number of Broadband Switches in the US Compared with Increase in Throughput, 2000-2006
Chapter II
II-1 Telecom Networks
II-2 Access Network Topology
II-3 Metro Network Topology
II-4 PSTN Local and Long Distance Network Interconnection
II-5 Increased Complexity of Metro Networks: The Impact of Additional Carriers
II-6 Idealized National US Network
II-7 Typical National US Network
II-8 Typical National Data Core Network
II-9 Core Network Locations by Traffic Patterns
Chapter III
III-1 Wireless Subscribers, 2000-2006 (Millions)
III-2 Network Nodes
III-3 Basic Switch Architecture
III-4 Route-Definition Process in a Basic Switch Architecture: Typical Router Configuration
III-5 Typical SS7 Network
III-6 North American DSL Connection Forecast, 2000-2006 (Thousands)
III-7 Types of PONs
III-8 Basic APON Architecture for FTTH, FTTB, FTTC, and FTTCab Structure
Chapter IV
IV-1 Hierarchy of Broadband Switch Function
IV-2 Edge Router Architecture
IV-3 ATM Switch Architecture
IV-4 Multi-Gigabit Router Configuration
IV-5 Terabit Router Architecture
IV-6 Optical Switch Configuration
Chapter VI
VI-1 Forecast of US Premises Access Lines, 2000-2006 (Millions)
VI-2 US Peak Time Data Traffic Demand: Residential vs. Enterprise, 2000-2006 (Gigabits per Second)
VI-3 US Overall Peak Time Data Traffic Demand, 2000-2006 (Gigabits per Second)
VI-4 US Aggregate Switch Throughput Demand for Data Traffic, 2000-2006 (Tbit/s)
VI-5 Hypothetical Locations of Broadband Switches in a Data Network
VI-6 Typical Large ISP Switching Configuration
VI-7 Basic Data Network Connections
VI-8 Types of Data Access
VI-9 Number of US End-User Data Connections, 2000 and 2006 (Millions)
VI-10 Bandwidth of US End-User Data Connections, 2000 and 2006 (Mbit/s)
VI-11 Forecast of US Aggregated Bandwidth of End-User Data Connections, 2000 and 2006 (Mbit/s)
VI-12 Aggregate Bandwidth by Type of End-User Data Connection, 2000 and 2006
VI-13 Summary of Data Network Connections, 2000 and 2006
VI-14 US Switch Port Forecast, 2000 and 2006 (Thousands)
VI-15 Total Number of Broadband Switches in the US, 2000-2006
VI-16 US Broadband Switch Inventory, 2000-2006
VI-17 US Broadband Switch Unit Sales Forecast, 2001-2006
VI-18 Forecast of Revenue from Sales of Broadband Switches in the US, 2001-2006 ($Millions)
VI-19 Comparison of Unit Sales Forecast with Sales Revenue Forecast, 2001-2006
Table of Tables
Chapter I
I-1 Distinctions between POTS and Data Networks, 2000
I-2 Network Locations of Broadband Switches
Chapter II
II-1 Quantitative Characteristics of Various Types of Telecom Networks, 2000
II-2 Summary of Features and Functions of Five Types of Networks
II-3 Distinctions between POTS and Data Networks, 2000
II-4 Ten Largest National Service Providers, 2001
Chapter III
III-1 Non-Residential Establishments, 1996
III-2 Impact of Applications on Broadband Switches
III-3 New Types of Service Providers and Their Impact on the Networks
III-4 Base Transmission Rates of an Optical Network, 2001
III-5 Partitioned Transmission Rates
III-6 Common Broadband Switch Fabric Technologies
Chapter IV
IV-1 Major Broadband Switch Functions and Features
IV-2 Typical Throughput Capabilities of Broadband Switches by Type
IV-3 Levels of Granularity for Different Types of Switch Fabrics
IV-4 Network Locations of Various Types of Broadband Switches
Chapter V
V-1 Alcatel's Broadband Switching Products, 2001
V-2
Cisco's Broadband Switching Products, 2001
V-3
Lucent's Broadband Switch Products, 2001
V-4
Nortel's Broadband Switch Products, 2001
V-5 Features of Major Terabit Routers, 2001
V-6 Features of Major Multi-Gigabit Routers, 2001
V-7 Major Features of Optical Switches, 2001
V-8 Features of Major Service-Oriented Broadband Switches, 2001
V-9 Features of Major Broadband ATM Switches, 2001
V-10 Features of Major Edge Routers, 2001
Chapter VI
VI-1 Reasons for Excess Capacity in Voice and Data Networks
VI-2 US Peak Time Data Traffic Demand: Residential and Enterprise, 2000-2006 (Gigabits per Second)
VI-3 US Aggregate Switch Throughput Demand for Data Traffic, 2000-2006 (Tbit/s)
VI-4 Number of Switching Locations, by Type of Provider, 2000
VI-5 Number of US End-User Data Connections, 2000 and 2006 (Millions)
VI-6 Forecast of Bandwidth of US End-User Data Connections, 2000 and 2006 (Mbit/s)
VI-7 Forecast of US Aggregated Bandwidth of End-User Data Connections, 2000 and 2006 (Mbit/s)
VI-8 US Access-to-Metro Point Connections, 2000
VI-9 US Access-to-Metro Point Connections, 2006
VI-10 US Metro Point-to-Core Data Network Connections, 2000
VI-11 US Metro Point-to-Core Network Connections, 2006
VI-12 US Secondary Hub-to-Primary Hub Connections, 2000
VI-13 US Secondary Hub-to-Primary Hub Connections, 2006
VI-14 US Primary Hub-to-Primary Hub Connections, 2000
VI-15 Primary Hub-to-Primary Hub Connections, 2006
VI-16 Network Locations of Broadband Switches
VI-17 US Broadband Switch Forecast, by Type of Switch, 2000
VI-18 US Broadband Switch Forecast, by Type of Switch, 2006
VI-19 US Switch Port Forecast, 2000 and 2006 (Thousands)
VI-20 US Switch Throughput Forecast, 2000-2006 (Tbit/s)
VI-21 Total Number of Broadband Switches in the US, 2000-2006
VI-22 Summary of US Broadband Switch Forecast by Switch Location, 2000 and 2006
VI-23 US Broadband Switch Inventory, 2000-2006
VI-24 US Broadband Switch Unit Sales Forecast, 2001-2006
VI-25 Cost of Line Cards in US, 2000 and 2006
VI-26 Forecast of Revenue from Sales of Broadband Switches in the US, 2001-2006 ($Millions)
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