ACG Research

ACG Research
We focus on the Why before the What

Tuesday, March 19, 2013

The Business Case for Ethernet Services for Mid-Sized Businesses

Network-based applications such as Voice over IP (VoIP), cloud, collaboration services and video applications of all kinds are driving the need for high-speed, high-quality and reliable networks that exceed the capabilities of the services many businesses are using today. Bandwidth requirements are forcing growing businesses to rethink their networking solutions. For example, we estimate that mid-sized business sites will require 25 Mbps to 85 Mbps of bandwidth over the next three years. TDM-based access networks in use today are poorly positioned to meet these emerging network service needs. They do not scale easily to meet higher bandwidth requirements, and quality guarantees and resiliency features must be added via a switching or routing overlay.

Ethernet services scale from 1 Mbps to 10 Gbps and beyond and have built-in quality and resiliency features that are compliant with industry-standard Carrier Ethernet specifications. When combined with an Ethernet LAN, Ethernet services provide an end-to-end Native Ethernet solution. This makes Ethernet services easier to install, operate and maintain than TDM-based access service alternatives.

For typical mid-sized businesses, ACG Research compared the monthly recurring costs of Ethernet versus TDM access for point-to-point, point-to-multipoint, and multipoint-to-multipoint network configurations. We found that Ethernet services have 56 percent to 71 percent lower costs than TDM-based alternatives. In addition, Ethernet services provide a complete end-to-end solution, while a switching or routing overlay must be added to the TDM access service to create a complete solution.

An analysis of scaling economics of Ethernet and TDM/SONET access services shows that Ethernet solutions are available at many bandwidth speeds with gradually increasing prices. In contrast, TDM bandwidth speeds are limited with steep price steps as speed increases. The TDM scaling behavior creates bandwidth barriers to increasing network capacity that can be overcome by switching to Ethernet services. 

Click here too download the whitepaper.

For more information about ACG Research's business case analysis service, click here.

Monday, March 18, 2013

The Economics of Cisco’s nLight Multilayer Control Plane Architecture

Networks are becoming more difficult to plan and optimize because of high traffic growth, volatile traffic patterns, changes in network architecture and more stringent service level agreements. Because the IP and optical control planes are not integrated, service providers’ networks are always over-engineered and underutilized with 50–75 percent of the network capacity deployed for network resiliency, not for passing traffic. A more economically efficient and effective network resiliency solution is needed.

Cisco has addressed this problem with nLight: a multilayer routing and optimization architecture that focuses on IP and DWDM integration, increasing network agility and flexibility while improving network utilization. ACG Research compared the nLight approach to protection and restoration to the widely used 1+1 optical protection scheme. Click here to download the TCO.

For more information about ACG Research's business case analysis services, contact

Juniper Networks Delivers the PTX3000 with 100G Integrated OTN

The proliferation of 100G connectivity in core networks is now spreading to the regional and metro/access areas. The demands in the metro access area are, in fact, similar for scale, connectivity and latency but actually up the bar when it comes to footprint, power utilization and lower BTUs per Gpbs.

Juniper Networks introduced the PTX5000 at OFC in 2011 and shook up the router landscape with the introduction of the first core-optimized  product on the market that delivers a simple architecture, which both content and service providers can leverage. 

The company has now introduced the PTX3000, which will play an important role in the metro core as Juniper Networks is now delivering the power of the Supercore in a transport package.

Eve Griliches 

Friday, March 15, 2013

Business Case for Shared Mesh Protection

Current approaches to network resiliency are inadequate to meet evolving network performance and cost requirements. Existing schemes such as 1+1 protection meet the sub 50 ms performance requirement but only protect against single failures and are too costly. Best-effort approaches such as software-based GMPLS mesh restoration are cost effective, handle multiple failures but do not meet the sub 50 ms performance requirement. MPLS FRR can protect against multiple failures and achieve local 50 ms performance but requires longer time frames for end-to-end convergence and uses more costly router ports. 

Infinera is implementing a new standards-based approach called Shared Mesh Protection (SMP) for network resiliency. ACG Research conducted a total cost of ownership (TCO) comparison of SMP versus 1+1 protection. The comparison is made for the TCO of line-side 100 Gbps WDM interfaces using a national reference transport network and a five-year study. It models traffic patterns to/from data centers, cable landing sites, and metro areas. Traffic increases at 85 percent CAGR over the study period. The comparison shows that the TCO for protection resources in SMP is 27 percent less as compared to 1+1 protection. The TCO savings result from the use of shared bandwidth managed by network intelligence to protect against multiple failures versus dedicated backup resources for single failure protection used by 1+1.

Tuesday, March 12, 2013

Cisco Leads in SP Video Infrastructure Hardware and Software Markets

Cisco continues to hold its commanding leadership position in the SPVI market (ACG Research’s Service Provider Video Infrastructure 4Q 2102 Worldwide Market report). Not surprisingly, Cisco has held a leadership position for many quarters based on it strengths in CMTS and packet infrastructure. It is notable that Cisco has been solidifying its position in STBs by taking share from Motorola in IPTV STBs and developing cable STBs (second place in market share).

In aggregate, the SP Video infrastructure market shrunk 2 percent to $13B in 2012. CMTS revenues dropped in the high single digits in 2012 though it remains a $1+ billion industry. CMTS build out is starting to level off as MSOs are completing their DOCSIS 3.0 build out and as port densities are doubling and reducing ASP. Cable STBs have been essentially flat, based on declining video subscribers; however, a mix of HD and DTAs has helped buoy the market. IPTV STBs were also down, driven by price pressures and demand for low-end devices in emerging markets.  Packet Core and BRAS saw double-digit declines in annual revenues; Carrier Ethernet gained modestly.

ACG also published its Video Infrastructure Software and Services Market 4Q 2102 report, which tracks conditional access systems (CAS), digital rights management (DRM), middleware, subscriber software and infrastructure software (head end, workflow, advertising). In the aggregate, Cisco leads this market, based on its strength in CAS. 

When combined, the hardware and software markets are approximately $16 billion in annual revenue. While we have seen a flattening of growth, this sector remains very strategic to SPs. The market is undergoing a transition as SPs deal with 1) competition from over-the-top video competition, 2) how to deliver video to multiple smart devices within the home, and 3) upgrading infrastructure to handle increasing bandwidth demand of consumers.

For more information about ACG Research's video infrastructure services, contact

David Dines

Friday, March 8, 2013

Juniper Networks: SDN Enabled Networking

Juniper recently announced its approach to transition enterprises and service providers to SDNs.  Ray Mota and Brad Brooks, Juniper Networks, discuss how to virtualize the mobile network with software-defined networking and network elements of Juniper’s vMCG solution. Click here to watch the video.

Click here for Michael Kennedy's related business case analysis.

For more information about ACG Research's syndicated and consulting services, contact

Tuesday, March 5, 2013

Emergence of Optical Networking in the Data Center

The networking industry is on the cusp of a major data center transformation where optical networking technology will play a pivotal role in shaping the next data center architecture. Fixed network topologies are adequate when data traffic is relatively predictable; however, data centers, today, are experiencing dynamic traffic flows that are unpredictable and require unprecedented amounts of any-to-any connectivity. In addition, server virtualization, workload mobility, and big data applications are changing traffic patterns from north-south to predominantly east-west, which places strains on typical spine/leaf networks. 

With workload mobility, virtualization, and cloud computing all vastly changing the data center, introducing the benefits of optical networking technologies into products that can manage network capacity, traffic flows, and scale to support thousands of server racks is bound to hit a sweet spot in the data center. Which company is incorporating multiple optical technologies into the data center and leveraging SDN? Click here to download the Market Impact.

Eve Griliches 

Is There a Business Case for Telecom SP IT Infrastructure services?

On the surface, cloud or IT infrastructure service initiatives appear to be attractive offerings for telecom service providers, but are they? Cloud or Infrastructure as a Service (IaaS) explicitly involves network services and hosting/IT infrastructure services. This combination of services holds the potential for higher margins and lower capital intensity than either network connectivity services or IT hosting services considered separately. These services provide higher value for subscribers than the traditional offerings because they delivery many management and support functions that subscribers would otherwise provide through internal resources, and they cost less to deliver because the cloud model improves asset utilization and reduces operating expenses. Click here to read more at FierceWireless.

Click here for more information about Michael Kennedy.

Click here for more information about ACG Research's business case analysis services or contact

Michael Kennedy

Monday, March 4, 2013

MWC 2013: New Venue, New Industry Spirit from Barcelona

Mobile World Congress 2013 has given the industry a boost of revitalization, focused on creating change and driving technology innovation to improve how we connect.

Mobile World Congress 2013 wrapped up last week in Barcelona at a new venue, the magnificent Fira Grand Via, with record attendance. Although this attendance created too much traffic and congestion, it did not dissuade industry delegates from collaborating and demonstrating a new industry spirit focused on innovation and human advancement in the area of mobile technologies.

Even without notable industry leaders such as Apple, Google, Microsoft, and Facebook, which declined to participate so that they could maximize their own events for major announcements, LG, Huawei, and ZTE took main stage with audiences and industry press. Samsung clearly established position with sizable show investment in the areas of mobile devices and consumer focused messaging, though it also decided to strategically shift its flagship “Galaxy S4” launch to New York in two weeks.

MWC 2013 showcased new themes; most notably it spotlighted Software Defined Networking (SDN) by vendors. In the mobile IP infrastructure segment, Juniper focused on the release of a virtualized platform for SGSN/MME functions. ACG expects other vendors to update road maps and further make announcements in 2013 in this area.

Machine to Machine (M2M) was another major theme with presentations and discussions on standards-based industry adoption. M2M industry has been fragmented, but mobile SPs see significant opportunity in developing services and ecosystems. ACG expects M2M data traffic to consume 20 percent of global mobile data demand in five years.

Small Cells segment saw a plethora of announcements: silicon leaders such as Broadcom and Texas Instrument released new product families to support multigeneration technologies such as 3G and LTE within a single System on a Chip (SoC). 

Mobile SPs also announced initiatives, such as cloud-based services to support third-party (HTML5 compliant) platforms from Jolla, Mozilla (Firefox OS), and Ubuntu (Linux).

Although much of the discussion was focused on the OTT industry segment and how to work together, ACG believes mobile SP business models will need to further evolve to adopt the range of innovation offered by companies such as Viber.

MWC 2013 did not disappoint. Attendees walked with innovative ideas and information, which will, no doubt, will be the foundation for creating more change and driving technology innovation in 2013.

For more information about ACG Research's mobility syndicated and consulting services, contact