Ethernet goes small-time

Ethernet is being used in different ways by different segments of the diverse SMB market. For example, a significant portion of what are called SMB customers are actually smaller locations of larger companies, said Bob Preston, senior product manager for Cox Business.

“It's hard to classify the small- to mid-sized business overall because it's so fragmented,” he said. “We have community banks and regional banks and medical customers using Ethernet to replace frame relay in connecting to a headquarters location or a larger facility.

“But we also see more and more folks that don't have legacy networks,” Preston added. “In the commercial real estate market, for example — office parks or apartment buildings — they have had no connectivity, and we are putting in Ethernet over HFC so they can do remote monitoring and management for power and for security cameras. We are doing Ethernet for traffic light camera monitoring, and the security and monitoring opportunities continue to grow.”

There are a few significant vertical markets for carrier Ethernet to the smaller locations, including education, health care and government. Cox is selling significantly into all three segments, said Kristine Faulkner, vice president of product development and management for Cox Business, because these networks tend to fit within its own regional footprint.

Verizon also is finding significant interest in Ethernet within the medical field, particularly for imaging, said Carlos Benavides, group manager of metro Ethernet services.

“It makes for instantaneous diagnosis of customer symptoms,” Benavides said. “It makes medicine and the specialists at these larger downtown hospitals available everywhere. Financial and professional services — engineering, law firms with Sarbanes-Oxley requirements for handling your data correctly and properly, which means there is a lot more data pushed through the network — are another major market for us.”

“We are seeing a lot of our customers provide data services for school districts,” said Juan Vela, director of product marketing for Occam Networks, which can deliver Ethernet from its access equipment. “They create a ring topology around the school district, connected over fiber, that basically creates a VPN for that school district. It's a common application for smaller to mid-sized carriers. Also, for hospitals we are seeing the same kind of connection being utilized over fiber for high-bandwidth applications like medical imaging and that kind of transfer.”

A great deal of Ethernet for SMBs is used to deliver faster Internet access, with that access being used in some cases to also deliver a VPN securely over the public Internet. But service providers also report a growing degree of upselling to point-to-point Ethernet connections among multiple locations and integrated access services.

“We are doing managed firewall service and VPN as add-on services,” Cavalier's Moore said. “Those are things you don't have to buy but we market with the service. We are developing an Ethernet point-to-point or virtual point-to-point offering that will be out in the second quarter.”

Where Verizon takes Ethernet to small businesses, it is over the FiOS network, which now passes more SMB locations all the time as it is built into neighborhoods. “The 10 meg service has been our sweet spot with small businesses,” Benavides said, adding that there is no difference between what Verizon sells to large businesses and what it is now selling in the SMB space.

AT&T bundles direct Internet access and VPNs with its Ethernet offering as well. “The way I look at Ethernet, AT&T has a wealth of services to offer for SMB customers, and Ethernet is an on-ramp to gain access to all of the service offerings that AT&T has,” Harris said. “Particularly for Layer 3 services, Ethernet will evolve over time to become the main access service.”

In addition to using Ethernet services as the on-ramp for Internet access, XO Communications is turning to it for voice-over-IP (VoIP) services and its integrated IP Flex offering, said Brent Spooner, director of product management for XO.

“I think when we use it as an access technology, we are not really selling Ethernet,” Spooner said. “They know what it is, but they are buying the underlying service, which is IP Flex or [dedicated Internet access].” That may be why SMB Ethernet services don't always show up on customer surveys, he said.

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