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Riverstone casts doubts on convergence odds

Riverstone casts doubts on convergence odds

With another contract under its belt for its metro Ethernet router in Asia, Riverstone has sounded a contrarian note, disputing that carriers are actively building converged networks, claiming instead that they are choosing to keep data, voice and video networks separate.

The most recent evidence for Riverstone's view is a contract with Japan Telecom, the country's second-largest carrier, to extend its broadband network for businesses and use Ethernet as an aggregation layer to direct DSL, leased lines, wireless access and dial-up mobile access traffic onto the network core. The company says the deployment is indicative of a trend of pushing off convergence and maintaining separate voice and data networks at carriers, rather than contend with the headache of a unified management system.

Context

Riverstone's contract with Japan Telecom is the router vendor's sixth with an Asian carrier that it has publicly acknowledged. Others include Hutchison Global Crossing for an MPLS-based Ethernet network that will eventually provide video-on-demand services, Korea Telecom to shift metro traffic onto Sonet rings and Korean utility communications division PowerComm for Ethernet aggregation. Its deal with Cox to replace the @Home broadband access infrastructure is probably its most high-profile deployment in the U.S. so far. While a deal is nothing to sniff at given the current capital spending environment, in the U.S., Riverstone's success will still be measured by its ability to beat out Cisco for metro Ethernet deployments at incumbent carriers. From a technology perspective, the deal is also unremarkable since its routers will simply be used for transport, rather than as a platform for new services.

Riverstone seemed to have avoided much of the bloodshed in the telecom equipment market until it warned at the end of February that its sales would fall short of its previous estimates because the screws had been tightened on spending at U.S. and European carriers. That hasn't stopped the company from investing in R&D to keep ahead of archrival Cisco, and its latest development is a virtual LAN that maps schemes to transfer ATM permanent virtual circuits to Layer 2 multiprotocol label switching (MPLS) tunnels.

Technology

The network topology and deployment of Riverstone routers is largely the same as some preceding deals. The routers will support an Ethernet aggregation layer sitting between traffic coming from access networks, such as dial-up services, leased circuits and wireless access, and the core network. The traffic is aggregated at a point of presence by a Riverstone RS 16000 router and then handed on to Cisco routers in Japan Telecom's core network. The alternative for a carrier like Japan Telecom would be to extend its Sonet infrastructure and install multiplexers, a far more expensive proposition than Riverstone's Ethernet routers.

The frequency that the company has deployed routers in that configuration has sparked some to question whether carriers are serious about building networks that carry voice and data on a single network, or are choosing to maintain separate networks. The conclusion is that, given the technical hurdles of management and the need to keep a lid on capital expenditure, "convergence will never happen," director of corporate marketing Steve Garrison told the451.

Of course, competing with a monster like Cisco, which has a major but still not well-articulated strategy called AVVID (Architecture for Voice, Video and Integrated Data) that assumes that converged networks are gathering speed, discounting the idea of a converged network lets Riverstone justify its concentration on data applications for the moment. Also, if it's true that voice, video and data networks will remain separate, Riverstone isn't just providing one element in the infrastructure. Cisco, by contrast, can claim to have all the network elements linked through a common management system.

There are two other possibilities that explain carriers' reluctance to embrace converged networks. The technology, such as softswitches, is still immature and remains complicated to manage. Many carriers could simply be delaying the buildout of converged networks and are pursuing a 'cap and grow' strategy with the Riverstone routers. In place of investing in new networks, carriers can use more efficient gear for routing the excess traffic generated on their networks. The strategy obviates the need to rip out new legacy equipment, and expands the capacity of the network.

Conclusion

It is curious that Riverstone has decided to take a stance that is so contrary to industry consensus. From a strategic perspective, and taking into account its battle with Cisco, the motivation for its claim is clear. But the company has been involved in most of the early metro Ethernet deployments and has some direct experience of how carriers are thinking about upgrading their metro networks. Convergence may take some time -- management issues and the maturity of technology are likely to be the culprits -- but Riverstone could have overstated its case.


the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.

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