How will Security, Reliability, and Cost Benefits Meet Requirements?

In a recent Yankee Group study, 70% of respondents said they currently use Ethernet services for the wide area network (WAN). Light Reading called 2005, "a phenomenal [year] for all things Ethernet." The benefits of WAN Ethernet are clear: isolation to meet stringent security needs, reliability, and low total cost of ownership (TCO).

This growing trend raises the question: Why is 2006 shaping up to be "The Year of WAN Ethernet" for the financial industry?

The short answer is: industry-standard carrier-grade Ethernet. With the rise of what's termed "Carrier Ethernet," the technology has developed enhanced quality of service features and standards to support high-performance and secure networking that meets the rigorous WAN requirements of financial institutions. Carrier Ethernet helps providers deliver robust SLAs for a customer's metro, regional and global WAN. Members of the Metro Ethernet Forum (MEF) and the Institute of Electrical and Electronics Engineers (IEEE) have developed standards and certification processes that enable interoperable service provider offerings of Carrier Ethernet which are scalable, reliable, high-performance, and manageable in the metro-to-global WAN environment.

Why Ethernet Pays

Carrier Ethernet for financial company WANs offers the lowest total cost of ownership (TCO) without compromising other requirements. Easily scalable Ethernet bandwidth lets users purchase exactly the bandwidth per port they require today, with the ability to scale up to Fast Ethernet (100Mbps) or Gigabit Ethernet (1000Mbps) in small increments as their requirements grow. WAN Ethernet thus avoids the excess costs of over-provisioning with a traditional SONET/SDH TDM circuit.

Carrier Ethernet facilitates WAN bandwidth upgrades without interrupting service. With the adaptability to meet capacity needs "on-demand," Ethernet users manage network changes with greater agility, reducing the burden of forecasting from a full year to only a month. Ethernet ports are also the least expensive physical ports for WAN infrastructure, leveraging the huge volumes of LAN Ethernet to be about 10 times less expensive than traditional TDM counterparts.

Part of the efficiency of Ethernet also lies in its jumbo frame capabilities, though not every service provider chooses to offer this feature. This capability increases efficiency by reducing frame data transfer overhead. The simplicity of Ethernet services also reduces operational TCO. Ethernet consists of a relatively simple transmission protocol that simplifies traffic engineering and UNI (user network interface) provisioning.

Can Ethernet Transform WAN Networks and Productivity while Supporting "Financial-Grade" Security and Reliability?

Banks and financial services firms want the total cost of ownership of WAN Ethernet, but cannot compromise on security, reliability, or manageability. Many financial companies require isolated WAN circuits for their backbone traffic. Carrier Ethernet services over SONET/SDH provide this capability in combination with Ethernet's TCO.

The number one benefit Yankee Group survey respondents cited in their selection of Ethernet was improved network reliability. Ethernet QoS provides network quality measurements that align with high-performance networking and management standards. SLAs include guarantees for packet loss, latency, jitter, and network availability.

Enterprise users cited the ability to enable new business applications as another key decision driver. Ethernet adopters are acting on the opportunity to upgrade their WAN using a technology that is both cost-efficient and future-proof, meeting or exceeding the performance characteristics of legacy data services, while laying the ground work for next-generation converged services.

IT managers need to utilize no-compromise WAN technologies like Carrier Ethernet to maintain their marketplace edge. With core and next-generation financial applications such as electronic banking and trading, regulatory compliance, disaster recovery, integration of data throughout locations, and synchronization of customer, product, and service information, enhanced WAN performance is a critical part of gaining competitive advantage.

Co-Authored by John Hoffman, Product Manager, VSNL International (j.hoffman@vsnlinternational.com or 732-203-3081) and Claire Butkus, Vice President, Research and Strategy, STC Associates (claire@stcassociates.com or 212-725-1900). Please visit www.vsnlinternational.com/ethernet for the full white paper on this topic.