Global Crossing’s EtherSphere Strikes another Blow to the Ethernet Market Laggers

| Oct 8, 2009 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Joel Stradling

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

October 6, 2009 – Global Crossing expanded its Ethernet services range, targeting enterprise and wholesale customers in the US, Europe, Asia, and Latin America. The new product line, named EtherSphere, offers point-to-point, point-to-multipoint and any-to-any VPLS topologies. Support for up to six CoS is available, and clients can use Global Crossing’s uCommand portal to monitor and manage services interconnecting 26 countries via nearly 80 globally deployed Cisco 7600 series routers.

Analytical Summary

• Current Perspective: Positive on Global Crossing’s EtherSphere product launch, because the carrier has come to market with a full range of Ethernet WAN offerings, including VPLS-based any-to-any mesh architectures, to cover all bases. EtherSphere builds on solid progress that Global Crossing made with its EtherExtend Flex Ethernet access service, and comes with a full bells-and-whistles feature-set that includes features such as online monitoring, support for up to six classes of service (CoS) and usage-based billing.

• Vendor Importance: High to Global Crossing, because the carrier is evolving its Ethernet strategy organically, building upon its MPLS core network and Ethernet access developments. The company is tapping its MPLS assets and investments, as well as pursuing Layer 2 Ethernet WAN technologies to meet the demands of its customers. At the same time, the EtherSphere launch fends off global VPLS progress already made by other services providers, such as AT&T, Telstra and Tata Communications, that are aggressively pursuing their own Ethernet plans.

• Market Impact: Moderate on the international Ethernet WAN services market, because Global Crossing joins a growing list of providers that now sell Ethernet VPLS mesh services, as well as point-to-point and point-to-multipoint carrier Ethernet. However Global Crossing has announced a compelling service range with some neat features, such as support for jumbo-frames and usage-based billing. The wide global reach and features of EtherSphere will cause trouble for rivals.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe |

Recommended Competitor Actions

• Competitors need to examine their own portfolios thoroughly and check off various important aspects, such as whether VPLS is available, whether their service supports many CoS tiers, whether customers get online monitoring, and whether pricing is flexible enough including usage-based billing and burstable traffic. If the answer is mostly no to these questions, then Global Crossing will score some advantageous differentiation points, and internal product developments need to get underway to boost the carrier Ethernet portfolio.

• Tata Communications, KPN International, SingTel, Reliance Globalcom, AT&T and Telstra can all stress that they have been in the market with Ethernet VPLS ahead of Global Crossing. These companies can therefore point to greater experience and try to present customer case studies to prove market traction and all-important experience. KPN, Reliance and Level 3 can also point out that they have been selling the hybrid Layer 2/Layer 3 concept already for a long time, and that there is little new in Global Crossing’s range.

• Verizon Business, BT Global Services, Telefonica Multinational Solutions and Orange Business Services, really need to come-to-market with international any-to-any E-LAN services, or face competing on a weaker footing in Europe. In the absence of such offers, these providers can point to strong international IP/MPLS networks and established capabilities in Ethernet Private Line products; and remind customers that they may not necessarily need the additional complexity of VPLS for their data network needs.

• Interoute can counter Global Crossing’s traffic bursting capabilities, because the Interoute offer also comes with such capabilities. Interoute also offers very high port speeds up to 10 Gig-E (but no bursting over 10 Gig-E) over a strong pan-European high performance network for both wholesale and retail enterprise prospects.

• Many service providers may have the upper hand over Global Crossing in their home country or region in the areas of local access, robust in-country operational presence and multi-lingual support. For example, COLT has to deliver a very strong message concerning its in-country infrastructure throughout its European operations, and Global Crossing cannot out-compete Tata and Reliance in India for intensive Asia-Pacific contracts. Carriers need to emphasise regional strengths and encourage prospects to look carefully at Global Crossing’s end-to-end offerings for network control and SLA consistency.

Recommended End User / Customer Actions

• Customers should certainly consider Global Crossing’s EtherSphere range, because the carrier has a well-rounded portfolio with some unique selling points that not all its rivals are matching. These include Ethernet VPLS in 26 countries, support for up to six CoS, comprehensive online monitoring and a flexible pricing framework. Moreover the carrier is a proven provider of reliable products, and EtherSphere fully complements, and interworks with, its IP VPN products.

• Clients ought to shop around as the market is featuring more and more modern carrier Ethernet offerings, with announcements coming through quickly and furiously. In many cases regional differences may dictate the final outcome of a bid process, and customers should educate themselves of the benefits of next-generation Ethernet offerings, and demand more from their service providers in terms of price, feature set and flexibility.

• End-users should look at carriers that have with strong on-net local assets in the countries where they need to do business, or for a provider with a solid Ethernet NNI framework for augmented reach via partners. Service providers that are able to secure native end-to-end Ethernet with local carrier cooperation will be able to offer the most consistent SLAs and better overall network control.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe |

Top