News Release

IP+Optical Q&A with Kevin Kennedy, Senior Vice President, Service Provider Line of Business

1. What does it mean to combine or integrate IP and optical
Jan 31, 2001

1. What does it mean to combine or integrate IP and optical networking technologies?

IP+Optical means combining the intelligence and flexibility of IP networking with the scale and economic efficiency of optical transport. Uniting IP and optical networking enables service providers to more appropriately scale networks to match the type and amount of traffic being delivered to customers, as well as simplify management and provisioning.

2. What is Cisco's IP+optical strategy? What proof points can you demonstrate that Cisco is moving this market forward?

Cisco is applying its expertise in building highly robust and scalable data networks to the task of integrating IP and optical technologies. This integration is occurring in four key areas: Building optical technologies and interfaces into Cisco's core IP routers, continuing to integrate IP technology into Cisco's optical networking products, developing an integrated network management framework across IP and optical network layers, and developing a unified, IP-based optical control plane that uses industry standard protocols.

3. What is the biggest challenge facing service providers today and why should they be re-tooling networks with a new IP+optical architecture?

Service providers are facing the challenge of moving from a voice world to the Internet and this entails developing new business models. SPs can excel in one of two routes: either competing on low cost for the mass market or specializing by delivering tailored services around specific customer requirements. For both strategies, the need for a re-architected network core is fundamental. What's required is a data-optimized, flexible and scalable layer 1 network that can deliver complex and robust IP services cost-efficiently. To apply this, network architects must view IP and optical network plans holistically-the intelligence at the IP layer is inextricably linked to the transport of data services.

4. You announced two new products-the Cisco 12400 Internet routers and Cisco ONS 15327 metro edge platform-on January 31. How do these new IP+Optical solutions help service providers?

The Cisco ONS 15327 metro edge platform, the newest and smallest addition to in Cisco's IP+Optical portfolio, upgrades the edge of metropolitan networks by efficiently transporting high-speed data, SONET/SDH services, and DWDM wavelengths directly from access rings to customer premises. The Cisco ONS 15327 metro edge platform can be installed in 20 minutes and is about the same size as a DVD player (about five inches high), enabling service providers to reliably deliver traditional voice, video, and other profitable data services at a fraction of the cost of other and larger products.

The 12400 family of Internet routers broadens Cisco's lineup of core IP routers for the service point of presence (POP) with 10Gbps line cards and a dedicated 25 million packet per second (MPPS) forwarding engine. These platforms, which use an unmatched distributed architecture and sustained line rate IP and MPLS performance in a fully loaded system, allow service providers to scale networks to core optical speeds and provide the bandwidth necessary for next-generation IP services.

5. How difficult is it for old-world SPs with extensive circuit switched networks to migrate to an IP+Optical infrastructure?

Service providers are facing several pressing market conditions: eroding voice revenues, growth in data revenues of more than 20 percent a year, and competition through deregulation with providers that compete on price, boutique service offerings and everything in between. So there are numerous opportunities, and some of these are technical, but fundamentally what needs to happen within a traditional service provider is a recognition that the rules of the market havechanged and that the service provider and its network needs to change to compete.

The most compelling reason for service providers to migrate to a Cisco-based IP+Optical infrastructure is that Cisco is the only company that can offer IP and optical expertise, fully operational products and network management software today, and is effectively combining IP+Optical for customers to roll out new services, ease management and bandwidth bottlenecks, and streamline operations.

6. In what service provider technologies and markets does Cisco innovate?

Cisco has brought substantial innovations to the optical transport market, such as wavelength routing, which in the Cisco ONS 15900 enables service providers to route wavelengths at network interconnect points, not just termination points. The full suite of Ethernet and IP interfaces on the Cisco ONS 15327 and Cisco ONS 15454 are entirely revolutionary, bringing IP flexibility to both the core and edge of the metro market.

In the IP space, Cisco has innovated in a large number of areas including Very Short Reach (VSR) optics, which has just been ratified by the OIF as a standard for interconnecting routers and optical transport equipment for cost efficient intra-POP connections. VSR connections can reduce intra-POP connectivity costs up to 50 percent and will accelerate the worldwide deployment of OC-192c/STM-64c technology.

It's not well known, but Cisco actually developed a high-speed chip for its routers because no other alternative existed at the time. The PXF (parallel express forwarding) ASIC enables service providers to turn on new services such as VPNs or voice, without impacting performance. And above all, Cisco has the industry's most reliable and scalable routers thanks to internal innovation, using a combination of a distributed architecture, priority-based congestion control, and dedicated line rate queuing.

7. Cisco always aims to be #1 or #2 in every market it enters - how is Cisco doing in the IP+Optical networking market?

Already, Cisco has made a great impact in the optical market, changing the discussion from one centered around voice and cost minimization, to understanding that service providers need to focus efforts on optimizing transport networks to handle data. As you may know, service providers have embraced this message, resulting in more than $1 billion run rate for the Cisco ONS 15454.On the IP side, we continue to lead the market, and in the latest calendar quarter, most industry market research firms indicated our lead is between 70 and 80 percent. Service providers are increasingly looking to Cisco to be able to help them bridge the IP and optical markets, which is propelling our IP+Optical strategy.

Because the transport and data networks are separate in most established telcos, local exchange carriers and PTTs, we are seeing the new data-centric providers being able to move the fastest to implement IP+Optical solutions. Some of these include Cogent, 360 Networks, Cambrian, BellSouth, Global Crossing, WorldCom, Qwest, and others. Established providers will move begin to move more rapidly to adoption as we continue to innovate with IP+optical technologies on both IP and optical equipment, drive integrated management of both network layers and implement an integrated control plane.

8. Some analysts believe that an end-end strategy runs counter to industry trends that point to carriers actually cutting costs by building lower-cost network designs and not increasing revenue by adding new features and services. Can you comment on that?

In fact, service providers need to do both: cut costs and increase profits. In the metro and core IP markets, this is happening in several ways. With flexible optical networking equipment that is closely tied to IP services, providers can install, turn on and provision new links much more quickly. This is what we mean when we say 'radical economics.' On the IP side, you need equipment that is reliable and scalable to handle mission critical service performance, and can flexibly adapt to new services. Cisco believes strongly in an open market based on open standards. For this reason, we created the New World Ecosystem program, which ensures for service providers who choose best-of-breed designs that there is tested interoperability, adherence to standards, integrated management, clear support methodologies, and healthy competition.