h

Future Opportunity Areas

In Optical Networking

Chris Rust

Founder & CEO

Mahi Networks

www.mahinetworks.com

IEEE INFOCOM 2003

April 2, 2003

M a x i m i z i n g C a r r i e r P e r f o r m a n c e TM

© 2003 Mahi Networks, Inc.

AgendaAgenda

• Drivers Of The Bubble and Explanation of What Changed• Themes in Network Transformation and Catalysts for Innovation• Overview of Current Network• Long-Term Future Network• A Close Look At An ILEC Central Office – Case Study in

Opportunity– Present Method of Operation– Role of Metro Core Aggregation Systems (MCAS) in Next Gen CO– Economic and Operational Benefits of MCAS Deployment

• Closing Thoughts

© 2003 Mahi Networks, Inc.

The Virtuous Cycle of 1997-2000Internet Boom + Telecom Act of 1996 = Hypergrowth

Converged Networkvoice/data/video/mobilityoperational efficiencies competitive advantage

pro-competitiveregulation

abundant capital

emerging carriers (CLECS, ISPS)

hyper-competitionhyper-competition

Spike in infrastructurecapital expenditures

cheap, abundantbandwidth

Need to broaden, bundle services

lower latency

applicationsexplosion

BW & serviceDemand ->Carrier Profits

disruptivetechnologies(i.e. DWDM)

changing traffic mixvoice @ +7% per yeardata @ +120% per year

ILECs, IXCsmerge for scale

Strong InternetSub Growth

© 2003 Mahi Networks, Inc.

Big Themes In Network EvolutionSurvivors Of The Valley Of Death

Big Themes In Network EvolutionSurvivors Of The Valley Of Death

Theme• Electrical To Optical• Circuit To Packet• Overlays to Shared Multi-Service• Narrowband To Broadband• Static Pt-Pt to Agile/Dynamic• Transport / Switching Integration• Manual To Automated• Rings To Mesh (in IOF, LH)• “Embedded Base Optimization”

– Networks Will Be Added To, Not Replaced, Due To Economic Realities

Drivers – Largely Non-Technical• Basic Carrier Viability

– Capex Reductions– Dramatic Opex Reduction

• “Triple Play” V/D/V Bundles• Changing Traffic Patterns

– Larger pipes– More data– Decreasing Revenue/bit– More Churn

• “All Distance Telecom”• Next Gen Content

Continued Innovation And Investment Needed At OpticalComponent, Systems, and Software Layers

© 2003 Mahi Networks, Inc.

Current Network Current Network –– Parallel TDM and DataParallel TDM and Data

FR Network

ONU

SS7 & AIN Network

SCPSTP STP

TDM Transport NetworkSONET ADM, DCS -> MSPP

Class 5 SwitchClass 4 Switch

CoreATM Network

SMS

ATU-R

DSLAM

NGDLC

MTSO for WLess

LEGACYDIAL ACCESS

xDSL

IP/ MANAGED VPN

RAS

Routed IP Network

BBAND GWAY

To long distancevoice network

FIREWALL

CONTENT CACHE

LOAD BALANCER

WEB SERVER

APP SERVER

DBASE SERVER

SAN

STORAGE

PBX and LANVOICE+DATA LEASED LINE

© 2003 Mahi Networks, Inc.

Future Network Future Network –– Rich in Optics And PacketsRich in Optics And Packets

FR Network

SS7 & AIN Network

SCPSTP STP

ATM Network

xTU-RVoDSL Mux

LEGACYDIAL ACCESS

xDSL

IPMANAGED VPN

FIREWALL

CONTENT CACHE

LOAD BALANCER

WEB SERVER

APP SERVER

DBASE SERVER

SAN

CENTRAL STORAGE

VoP CARRIER CONVERGENCE

SWITCHCore NetworkIP/MPLS over DWDM, MCAS

MSPPIntelligent Optical Edge

~~

~~

~~

~~

VoP Softswitch Call Control Complex

LOCAL CACHE

STREAMING SERVER

ONU

DISTRIBUTEDSTORAGE

Dynamic Optical TransportMCAS: ADM+BBDCS, ROADM

Λ conversion

Class 5 Switch

Packet-based Multi-line voic&data over copper, wireless, and coax

SIGNALINGINTERWORKING

UNIT

SMS

© 2003 Mahi Networks, Inc.

Zooming In - Today’s Metro/IOF COZooming In - Today’s Metro/IOF COBased on Stacked ADM/MSPPs and DS-3 InterconnectionsBased on Stacked ADM/MSPPs and DS-3 Interconnections

• DS3 is the most common CO currency today, and the top selling MSPP card

• Craft-intensive architecture based on coax and DSX panels

• Inefficient manual cross-connect process

• Multiple points of failure

• High space and power requirements

• High Capex and Opex penalties

© 2003 Mahi Networks, Inc.

Tomorrow’s CO Using Current ApproachTomorrow’s CO Using Current ApproachHigh-Cost Equipment Stretches CO LimitsHigh-Cost Equipment Stretches CO Limits

New Circuit Growth

• Continue to spend on non-optimized network elements

• Inefficient manual cross-connect process

• Increased points of failure

• Greater space and power consumption

• Result• longer spans > more

repeaters• facility exhaust from

floorspace, riser, plenum consumption

• Opex grows w time

© 2003 Mahi Networks, Inc.

Mi7 Optical Node Interconnection (ONX)Mi7 Optical Node Interconnection (ONX)Eliminates DS-3 Plumbing and Speeds ProvisioningEliminates DS-3 Plumbing and Speeds Provisioning

ATNMET

SRA

ONX™ONX

Elimination of network elements and cabling

Enables software-configurable cross-connects

Fewer points of failure improves reliability

Major capex and opex savings with simpler architecture

RequirementsDCS for LEC networkLEC OSS; OSMINEPath to OXC integration for express channels

© 2003 Mahi Networks, Inc.

Mi7 SONET Ring Aggregation (SRA)Mi7 SONET Ring Aggregation (SRA)Reduces SONET Equipment and Improves ManagementReduces SONET Equipment and Improves Management

SRA™

ONXATNMET

SRA

• Eliminates SONET/SDH ADM/MSPP ‘Stacking’

• Eliminates optical and electrical inter-connection

• Further decreases space and power

• Relieves plenum and riser congestion

• Requirements• High OC3/OC12 fan out• Remoteable DS3 access• IP and OSI DCC interop• Low installed 1st cost• SR/IR/LR laser support

© 2003 Mahi Networks, Inc.

Mi7 Metro Ethernet Transport (MET)Mi7 Metro Ethernet Transport (MET)Re-Employs SONET Facilities For Carrier-Class EthernetRe-Employs SONET Facilities For Carrier-Class Ethernet

MET™ONX

ATNMET

SRA

End service-specific overlay networks via L1 transport/L2 switching integration

Reduce costs by eliminating L2 switch layer

Requirements:L2 Stat-Mux in MCAS for oversubscription to lower transport costsVLAN processingGbE <-> SONET mediation gatewayScalable L2 processing

© 2003 Mahi Networks, Inc.

GMPLS Mesh Protection and Automated ProvisioningGMPLS Mesh Protection and Automated ProvisioningMi7 Automated Transport Network (ATN)Mi7 Automated Transport Network (ATN)

A TO Z PROVISIONING COMMAND

ATN™ONX

ATNMET

SRA

GMPLS Mesh NetworkRequires “intelligent”

MCAS with full IP control plane

STS1 Grooming and M:N Mesh Networking

Multi-Vendor Network Topology Discovery

Similar to SS7 Effect on Voice Network

© 2003 Mahi Networks, Inc.

The Mi7 Metro Core Aggregation SystemThe Mi7 Metro Core Aggregation SystemPlatform Overview

Mi7 System Specifications

SONET/SDH add/drop multiplexer with integrated cross-connect, L2 switch & GMPLS control planeDS3—OC-192 interfaces (VSR-LR)512 OC3/12, 128 OC48, 256 GbETarget Applications:

Optical Node InterconnectionSONET/SDH Ring AggregationMetro Ethernet TransportAutomated Transport Networking

Multi-vendor interop: replace CO ADMs and re-deploy them to edgeLow installed first cost & pay-as-you-grow price flexibility

Mi7320 GbpsMulti-Svc

MCAS

Mi7320 GbpsMulti-Svc

MCAS

Dx7 Electrical Tributary

Expansion Shelf

Dx7 Electrical Tributary

Expansion Shelf

OSMINEOSMINE

SONET: Synchronous Optical NetworkGMPLS: Generalized Multi-protocol Label SwitchingVSR: Very Short Reach lasers; LR=Long Reach lasers

© 2003 Mahi Networks, Inc.

RBOC CO Economics: MSPP+DSX PMO vs MCAS FMORBOC CO Economics: MSPP+DSX PMO vs MCAS FMOCapEx and OpEx Results For ~20 OC48/Year With Net OASys™

Percentage Savings

0%10%20%30%40%50%60%70%80%90%

1 2 3 4 5 6 7 8 9 10 11 12Time (Quarters)

Power Savings

0%10%20%30%40%50%60%70%80%90%

1 2 3 4 5 6 7 8 9 10 11 12

Time (Quarters)

Opex Savings(includes Space, Power, Service Orders)

0%

20%

40%

60%

80%

100%

1 2 3 4 5 6 7 8 9 10 11 12

Time (Quarters)

Bay Requirements

0102030405060

1 2 3 4 5 6 7 8 9 10 11 12

Bay

s PMOMi7

Time (Quarters)

Mahi Networks Net OASys

© 2003 Mahi Networks, Inc.

SummarySummary

• Industry Took An Abrupt Pause After 3 Years Of Irrational Exuberance, But Future Of Optical Networking Remains Vibrant

• Traffic Growth Drivers Have Slowed, But Bright Spots Remain– Total US High Speed Data Subs Grew 45% to 18.3m and 23% of Homes in 02

with Cable at 11.5m, DSL at 6.5m (Lehman Brothers 3-14-03)• Bandwidth-Intensive Emerging Services Such as Personal Video

Recorder, Pay-Per-View, HDTV, High Quality Audio are Happening• Major Opportunities Remain At All Levels Of Optical Foodchain

– Systems: MCAS, DWDM/ROADM, Ethernet Metro Access,…– Components: Metro EDFA, Tunable everything, next gen packaging – Software: GMPLS, Wavelength Services,…

• Key Growth Drivers For Next Optical Wave Are Economic, Not Technical– E.g. Business Value of Multi-service MCAS With Intelligent Control Plane Is

Redefining How Local Exchange Networks Are Built, Operated