3Com start-up branches into metro

Company hopes `Optical Ethernet' makes the MAN With some key financing and access to 3Com's intellectual property, Atrica is flying the comfortable coop of 3Com to compete in a space full of vendors - and opportunity. This week, the now-independent start-up will officially launch its concept of "Optical Ethernet" in the metro area, and France Telecom has agreed to test it.

Unlike other vendors in this space, Atrica focuses on displacing Sonet by bringing Ethernet from the edge through the metropolitan area network (MAN). The company is proposing Optical Ethernet, which would bring 10/100 Mb/s Ethernet and gigabit Ethernet into the metro.

It's a natural extension of Ethernet, said David Yates, vice president of marketing for Atrica."Ethernet dominates all the edges of the network," he said, "but the metro network is low speed. Sonet/SDH tops out at OC-48."

The metro market is on a steady rise - RHK estimates that the Sonet/SDH market will be about $25 billion in 2003 (see figure) - and swarms of vendors are focusing on core metro devices. But Atrica wants to provide "a complete solution for the transmission network,"Yates said.

The company is cautiously vague about the upcoming product family. It will develop an edge device "to enhance the deployability of the network" and a core optical switch with Ethernet switching capabilities and an electrical switching fabric, Yates said. System management and provisioning are handled through browserbased software.

A similar solution could be built by stacking multiple existing devices, Yates said, "but we don't think carriers need that. This is a new category of optical Ethernet equipment. We're building something from the ground up to address the metro market."

Atrica has received $20 million in funding - $4 million from 3Com in the seed round and $16 million from investors such as Accel Partners, Benchmark Capital, France Telecom and other service providers.

In fact, France Telecom this week will announce that it will test Atrica's solution when it is available late this year and in early 2001.

"The metro market is exploding and rapidly moving toward data. We believe Ethernet has an important role to play," said Frederic Veyssiere, managing director of Innovacom U.S., the venture capital arm of France Telecom.

Atrica's system supports different topologies - bus, star and mesh - and can transport signals 60 to 70 kilometers, he said. In addition, it will allow carriers to emulate existing services such as T-1/E-1 and OC-3/STM-1. "And it can do that at a much lower cost than regular Sonet technology can offer," Veyssiere said. The cost of a 100 Mb/s Ethernet link potentially could be $100 to $200 per month, much less than an OC-3 Sonet link, which can cost about $5000 per month.

Using Ethernet in the metro will bring some obvious benefits. It's a standard technology used in most LAN environments. It also has been around a while, so equipment can be less expensive to manufacture.

"The component volumes are huge, which means the costs are driven to the lowest possible [point] by using Ethernet as the base technology,"Yates said.

But to be successful, Ethernet must be as reliable as Sonet, providing traffic management and system redundancy. "Ethernet must be engineered for this," he conceded.

That introduces a level of complexity that some carriers can't afford. Atrica could be fighting an uphill battle. "There will be a learning curve,"Veyssiere said.

Still, some argue that making the switch now will be better in the long run.

"Now is the appropriate time to shift to that level of complexity, rather than three years from now after we roll out more of the Sonet-based infrastructure," said Fred McClimans, managing director of McCli-mans Technology Partners, a venture capital company but not an Atrica investor. "Anything that is done now to simplify the network is a good step."

The shift in network design is an obstacle, but it is not insurmountable.

"Sonet is very secure, and it has guaranteed bandwidth and the restoration time of 50 miloseconds that you need for voice. The challenge will be [for Atrica] to recreate all these qualities into an Ether-net-based technology over metro distances," Veyssiere said. "If they do a good job, it will be unbeatable as far as cost structure is concerned."

Though many vendors have turned to the metro market, McClimans believes that the main competitors are the long-established ones: Cisco Systems, Lucent Technologies and Nortel Networks.

"It will take another 12 months before the metro market is conditioned to accepting Ethernet at all," he said. "You can really tell if it takes off if larger firms [are forced to] acquire smaller companies rather than trying to manufacture this themselves."

That said, McClimans doesn't believe Atrica is an acquisition target.

"These days, [to get funding] you have to be able to show that you are going to be able to stand alone in the long term. Those are the realities of venture capital today," he said.