Metro Ethernet Webinar Welcome to Business Benefits Key

Metro Ethernet Webinar • Welcome to ‘Business Benefits & Key Applications for the Enterprise’ – A discussion about what business benefits enterprises can and should expect from Ethernet services in metro networks • When: Thursday 6 November 2003, starts 4 pm, BST / 11 am EST / 8 am PST • To participate in this Webinar, call: +44 (0)207 663 4862, access code: 140577

Introduction to Ethernet Services A discussion about what enterprises can and should expect from Ethernet services in metro networks

Hot topics • Why Metro Ethernet has recently emerged as the hottest area in the telecoms sector • Why are businesses asking for the benefits of metro Ethernet? • Main business applications for Ethernet services • The quest for ensuring Qo. S • What is the Metro Ethernet Forum (MEF) doing to co-ordinate standards efforts?

Panellists • Mark Fishburn, Chairman • Colin Evans, business development & marketing • Frank Brockners, Chief technologist, corporate product and technology marketing • Pat Matthews, Yankee Group Moderator: • Manek Dubash, Contributing Editor

Mark Fishburn Chairman of the Board Vice President, Technical Strategy

Colin Evans Co-chair, marketing & events committee Business Development and Marketing

Frank Brockners Chief Technologist, Product and Technology Marketing

Pat Matthews Senior Analyst, Yankee Group

Manek Dubash Moderator: Contributing Editor

Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: – What applications gain efficiency from Metro Ethernet? – The business case for Metro Ethernet – why migrate from other services? – Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

Metro Ethernet services for the enterprise Mark Fishburn MEF, Chairman of the Board mark. fishburn@spirentcom. com

MEF priorities and scope • MEF Mission: Accelerate adoption of optical Ethernet as the technology of choice in metro networks worldwide • The primary priorities of the MEF are to define: a. Ethernet Services for metro transport networks Such services shall be delivered over native Ethernet-based Metro networks and can also be supported by other transport technologies. b. Carrier-class Ethernet-based metro transport technologies by specifying architecture, protocols and management for Ethernet-based metro transport networks • Market Objective: Deployment of robust, lower cost, industry standard services that seamlessly enable enterprise applications

Critical enabling technical and business deliverables Ethernet as carrier-class transport technology – Services Definition…E-Line and E-LAN – Protection, Qo. S, OAM, UNI, NNI • New Opex and Capex quantified business cases

Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: – What applications gain efficiency from Metro Ethernet? – The business case for Metro Ethernet – why migrate from other services? – Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

Evaluating the challenges/ opportunities for Metro Ethernet services Colin Evans Co-Chair MEF Marketing colin. evans@nativenetworks. com

Challenges/opportunities for Metro Ethernet services in the Enterprise • Data traffic growing at more than 200% per year = Spiraling costs • Network Complexity • Critical applications not getting network resources • Loss of productivity • Long lead times for deployment of new applications • Access Bandwidth limitations • Specialised networking skills • • • Reduced Cost • Lower OPEX & CAPEX Network Simplification • Single Protocol end-to-end and bandwidth flexibility Performance • Carrier-grade service for carrying mission-critical applications with Guaranteed Qo. S/SLA New Applications • Enabled by transparent plentiful bandwidth Security • Virtual private networks Simplified Support • Familiarity with the Ethernet technology - common skill sets already employed in the LAN

Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: – What applications gain efficiency from Metro Ethernet? – The business case for Metro Ethernet – why migrate from other services? – Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

Business benefits and applications

Enterprise IT initiatives & applications Lowering Costs Addressing Uncertainties • Application Integration; extended enterprise • New e. Businessapplications • Facilitate better Collaboration • “Triple Play” voice/video/data convergence • Consolidate IT resource • Server/Storage/ Network Increasing Productivity Improving Competitiveness • Distributed data centers • Improve responsiveness and availability • Resource pooling – Grids, SAN • Business Continuity • Data back-ups / Disaster recovery • New IT model • Outsourced/ Outasked/ On-demand

Changing uses of IT and communications Application moving from LAN to WAN centric E-Commerce Virtualization of business processes across traditional geographic and organizational boundaries Untethered Worker Supply Chain Workforce Optimization Enterprises extend sales reach & lower ops cost Customer Care Enterprises link remote/teleworkers Enterprises achieve efficient & effective Enterprises build collaboration virtual contact center operations Enterprises outsource “context” function

Vertical Market Applications Distributed & Bandwidth Intensive Education/ Research Retail/ Consumer • CRM • Supply • Grid Computing Chain Management • Imaging • Kiosk • Visual • Multichannel ization retailing • E-Learning • Trading • Multimedia partner collaboration Financial Services • CRM • E-Learning • Smart Branch • Data warehousing • Outsourcing Government Manufacturing • e. Government • Workforce Optimization • E-Learning • e. Citizen • Record management • ERP • Supply Chain Management • E-Learning • Product data Management • Collaborative product Design Media/ Entertainment • Digital publishing • Digital Media delivery • Digital asset management • Digital archiving

Why migrate from other services? Technology Flexibility • Based upon Ubiquitous Ethernet “Plug-and-Play” Technology • Transparent transport simplifies network architecture • Guaranteed Bandwidth with Ability to Burst • Clear migration path – leverages existing Ethernet protocol deployment Value • Less expensive alternative to private line, FR/ATM communication networks • Enables Enterprises to deploy new applications quickly & easily with minimal capital investment • Leverage existing human capital – no new training is required • Future viability of Ethernet technology • Significant CPE Cost Savings • Flexible, reliable, high-capacity solution No Rigid Bandwidth Limitations • Provides Flexible connectivity site-bysite (e. g. Multipoint L 2 VPN) • Multiple service classes per application • Allows Enterprises to support new applications including: - Voice, Video, IP, Multicast etc. Metro Ethernet Scalability • Supports scalable bandwidth access – from 1 Mbps to 10 Gbps and beyond … • Simple migration to higher performance without disruption • Highly reliable carrier-class services with guaranteed performance • Secure communications for mission critical applications

Case Study: Healthcare Provider Key requirements • Reliably transport and protect patient data and high-resolution images (X-rays, CAT scans, and MRIs) between sites and across town. • Accuracy of image • Urgency of transfer – “virtually uninterrupted” • Security (highly personal) • Scalability • Picture Archiving and Communication – L-Sping Hospital A LL LL LL Images are 100 Mbytes and more in size Mode of operation before migration Hospital B Hospital C Suburban Analysis Lab • A local health system with three locations • Lacking high-speed data connection to each facility • <10 M to all sites currently via leased line and frame circuits • Limited budget and IT staff • Multiple LAN environments operating independently

Case Study: Healthcare Provider Case Study Metro Ethernet Solution • Secure, flexible, scaleable, high-speed access • • • delivery of patient data and medical images • Attributes can be enhanced: Bandwidth; Service Classes/SLA (Qo. S); Security (add IDS, . . . ) Scaleable architecture that can grow smoothly as applications and demand increase • Introduce new applications over time Hospital locations can communicate among sites and to lab Metro Ethernet Solution costs less than one third of Frame Relay • Metro Ethernet (100 Mbps, 1 Gb. E max) • TCO (1 yr): $20. 4 K, $0. 2/Kb/yr; • compare with FR (45 Mbit/s max) • TCO (1 yr): $63 K $1. 4/Kb/yr Hospital A 100 Mbit/s METRO ETHERNET Hospital B 100 Mbit/s Hospital C Suburban Analysis Lab

Metro Ethernet Services Mark Fishburn MEF, Chairman of the Board mark. fishburn@spirentcom. com

Metro Ethernet Services E-Line Service • Used to create – Private Line Services – Virtual Private Line Services E-LAN Service • used to create – Private LAN Services – Virtual Private LAN Services

Examples of Service Attributes Bandwidth Profile: Defines the way in which less than the full physical bandwidth of UNI can utilized by the subscriber. Committed Info Rate (CIR), Excess Info Rate (EIR) Service Multiplexing: Multiple EVCs accessible at a single UNI. Reach multiple destinations across the MEN via a single UNI, e. g. , a Gigabit Ethernet UNI. IWF Interworking Function: Non-Ethernet services via an Interworking Function (IWF), e. g. , TDM over Ethernet

Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: – What applications gain efficiency from Metro Ethernet? – The business case for Metro Ethernet – why migrate from other services? – Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

Market predictions for Enterprise Metro Ethernet Services Pat Matthews Senior Analyst, Yankee Group PMatthews@yankeegroup. com

Worldwide Metro Ethernet Forecast Worldwide Metro Ethernet Revenue Forecast 8, 000. 00 Metro Ethernet CAGR*: 50% 7, 000. 00 *Forecast Excludes Ethernet Internet Access Revenue USD Millions 6, 000. 00 5, 000. 00 4, 000. 00 3, 000. 00 2, 000. 00 1, 000. 00 Total Revenue Metro Ethernet: PT-PT, PT-MP, Any-to-Any 0. 00 2002 2003 2004 2005 2006 2007 Source: Yankee Group

Worldwide Metro Ethernet Forecast Metro Ethernet CAGR: 50% * Forecast excludes Ethernet Internet access Source: Yankee Group

Total FR, ATM, and Local PL vs. Metro Ethernet Note: Metro Ethernet still only ~15% of the market in 2007 Source: Yankee Group

Ethernet’s capacity benefits surpass its cost savings Which of the following are Ethernet benefits compared to traditional data services? (Select 1 -5 for each item) Beneficial (top 2) Not beneficial (bottom 2) • 80% of respondents rank scalable and higher capacity as best benefits of Ethernet Higher capacity Improved reliability Scalable capacity • 62% rank cost savings as best benefit Increased performance Ability to support new services Easy IT handoff – 7% say savings is not a benefit Reduced staff / OPEX • Reliability and performance ranked high, too Faster provisioning Reduced capital expenditures 0 20 40 60 80 100 Percentage of respondents (n=144) Source: Yankee Group

Conclusions • Metro Ethernet today is where IP VPN was three years ago: services need to be clearly delineated, standards need to be solidified, and customers need to understand the ROI • Transition to this technology will need to be painless at every step • Customers need to understand that they will not have to migrate again in two years • In the long run, EPL and EIA will not be enough—WAN replacement is key for the service’s financial sustainability • Ethernet will have a significant share of the metro market in five to seven years

Agenda • MEF Overview: Introduction to ‘Ethernet Services’ • Evaluating the challenges/opportunities for Metro Ethernet services in enterprises • Business Benefits and Applications: – What applications gain efficiency from Metro Ethernet? – The business case for Metro Ethernet – why migrate from other services? – Attributes of Metro Ethernet Services that enable distributed application networking • Analyst Outlook: Market predictions for Enterprise Metro Ethernet Services • How the MEF is promoting Metro Ethernet Services

Agenda Over to you: Q&A

References • Metro Ethernet Services – A Technical Overview – http: //www. metroethernetforum. org/metro-ethernet-services. pdf • Metro Ethernet Networks – A Technical Overview – http: //www. metroethernetforum. org/PDFs/White. Papers/metro-ethernetnetworks. pdf • Metro Ethernet Case Studies – http: //www. metroethernetforum. org/ME_Case. Studies. htm • Metro Ethernet Forum Frequently Asked Questions – http: //www. metroethernetforum. org/MEF_FAQ 061702_Final. pdf • Yankee Group’s Optical Ethernet report – http: //www. yankeegroup. com/public/home/research_showcase. jsp? ID=10480 • An archive of this Webinar can be found at – http: //invite. Mshow. com/signon. asp? Cobrand=100&usertype=0&Show. Num=137967%20