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Economics of ethernet over SONET/SDH

Ethernet provides a simple, cost-effective solution for transporting enterprise data applications that is fast replacing traditional private line and frame relay services. However, carrier-class Ethernet architecture is still evolving and transport vendors need a flexible architecture that provides a hedge against the timing and extent of migration to Ethernet. Ethernet over Synchronous Optical Network (SONET) provides a viable architecture that allows service providers to start offering Ethernet service without overcommitting themselves, while protecting their embedded base. This paper presents an economic evaluation of Ethernet-over-SONET architecture based on a number of scenarios that serve as building blocks for service provider network transformation. We construct a business model that evaluates the various alternative strategies available to the service provider to address bandwidth demand growth and simultaneous migration from legacy to Ethernet services. © 2007 Alcatel-Lucent.