Metro Ethernet catching on

Incyte Genomics is about as high tech a company as you'll find, providing genomics technology and information to biotech and pharmaceutical clients. But until recently, the company had a decidedly low-tech means of updating its gene research database.

An Incyte systems engineer would compile the 15G to 40G bytes of new research generated every 10 days by the company onto a CD, drive out to an Exodus Communications data center where the database was hosted, and perform an update.

"Because of the amount of information we were dealing with, there was really no other way to do it," says Phil Kwan, Incyte's associate director of network infrastructure.

But now, thanks to a connection provided by metropolitan Ethernet provider Telseon, Incyte can dispense with the CD and car and send new information directly to the data center over a connection that can scale up to 100M bit/sec in 1M-bit/sec increments.

In major metropolitan areas across the U.S., providers such as Telseon and competitors Yipes Communications and Cogent Communications, are serving bandwidth-hungry businesses with high-speed Ethernet-based connections at prices that can be up to 80% lower than traditional carrier data services.

While early adopters had some reservations about relying on these relatively unproven providers in a tough economic climate, especially in light of the recent competitive local exchange carrier (CLEC) meltdown, the bandwidth, price and simplicity of the metropolitan Ethernet service won them over.

Instead of relying on a SONET infrastructure, which is optimized for voice and expensive to deploy, metropolitan Ethernet providers use a combination of fiber, dense wavelength division multiplexing (DWDM) and Ethernet boxes. The combination of DWDM equipment and simple Ethernet gear is much less expensive than SONET equipment, enabling metropolitan Ethernet providers to offer cut-rate pricing.

The metropolitan Ethernet model is clearly appealing to investors. While many CLECs have had trouble raising a dime in recent months, metropolitan Ethernet providers are still being awarded funding.

In February, Yipes closed its third-round financing, raising $200 million. To date, Yipes has raised more than $291 million, Telseon more than $260 million and Cogent more than $116 million.

Incyte, which has also used Telseon to replace some T-1 lines and frame relay intercampus connections in Palo Alto, can get four to six times the bandwidth it was getting before at the same cost, Kwan says.

An added bonus is the ability to order more bandwidth on the fly. Through a Web interface, Telseon lets customers order extra bandwidth by the megabit.

"Every two months or so, we may see a sporadic increase in traffic," Kwan says. "If I know that's coming, I can get on the Web-based provisioning system, turn my bandwidth up and wait 2 or 3 minutes for the change to take place."

Adding more bandwidth increases Kwan's costs. Telseon charges a rate based on the amount of bandwidth ordered and the distance traveled. But, Kwan says, the added flexibility is worth the price and definitely better than waiting weeks or months for an extra T-1 or T-3 line.

To connect back into Telseon's network, Kwan has a customer service interface unit - a fancy name for an off-the-shelf Gigabit Ethernet box - installed at each campus. The boxes connect back into Telseon's network over a fiber connection and hooking them up and maintaining them has been a straightforward task for the vendor, Kwan says.

Suffolk University in Boston also had an easy time setting up its metropolitan Ethernet connection to Yipes, says Paul Ladd, the school's MIS director.

Suffolk uses Yipes to get a high-speed connection to the Internet. The school owns and operates its own metropolitan-area network and the 1.5M bit/sec T-1 connection it had been using previously was just too slow.

Also, Ladd says, the school is considering doing some work with voice over IP, videoconferencing and application service providers, so a higher bandwidth connection was necessary.

Ladd considered a number of providers in addition to Yipes, including Verizon, AT&T, Broadwing, Sprint and XO Communications. Yipes won out for two reasons.

One was price.

"Yipes service was about 50% less than anyone else," Ladd says.

Suffolk is paying about $3,400 per month for a 10M bit/sec connection on a multiyear contract, with free service for the first four months, Ladd says.

The second reason was Yipes solved the problem of getting a last-mile fiber connection to the school.

Yipes discovered that NStar, a Boston-area gas and electric utility, had last-mile fiber running into Suffolk's buildings and leased the fiber from the utility.

"The major hurdle to getting a high-bandwidth service had been the last mile," Ladd says.

"And when they said they could solve it and explained how, that pretty much sealed the deal," he adds.

Although Suffolk currently has only a 10M bit/sec connection, the school is connected to the Yipes network through a gigabit interface. So if the school needs to increase bandwidth, it can do so quickly.

"You can call them up and have them change the bandwidth almost instantaneously," Ladd says.

In addition to his Yipes connection, Suffolk has a secondary T-1 link from Genuity. Ladd is considering using a third provider and may go with another metropolitan Ethernet firm such as Cogent.

The one concern Ladd has with Cogent is its pricing scheme. The provider offers a 100M bit/sec Internet connection for $1,000 per month, but, Ladd says, Cogent charges month-to-month and he wants a long-term contract.

"If you become accustomed to that bandwidth and they suddenly come back and say they want $10,000 per month, what are you going to do?" Ladd asks.

While Ladd is happy with his Yipes service, his one concern with Yipes and other relatively new providers is their business stability.

"The thing that's scared me is that between six and eight of the guys I looked at have gone out of business in the last little while," he says.

Enabling Web apps

InSORS makes a collaborative conferencing product and needed a high-speed connection to run the system in its headquarters.

After looking at about 12 providers, inSORS went with Cogent.

It wasn't a tough decision, given that traditional providers were asking between $14,000 and $17,000 per month for a T-3, Gleason says.

All Cogent had to do to set the service up was run some fiber up the risers in inSORS' building and connect a small access box to the firm's router.

Gleason notes that companies such as Cogent, Yipes and Telseon are a big boost to any firm marketing a product that requires a lot of bandwidth.

"The prices these firms are charging is what's allowing us to bring our product to market," he says.

And, Gleason adds, the metropolitan providers are forcing incumbent carriers to offer more competitive packages.

"Qwest [Communications] recently came in, and the price crept down," he says. "They offered us a multiyear contract for DS-3-type speeds at about $5,800 per month."

Gleason adds that the service Qwest was marketing was still in beta-test version, which may explain the lower pricing.

While none of the users interviewed was using Ethernet for long-haul connections, metropolitan Ethernet providers do offer such services. Incyte's Kwan says his company is on a waiting list for Telseon service in several U.S. cities to get Ethernet WAN connections.

"I know they're working with partners to set these links up, and once they do it in a big way, it's going to change the WAN dynamic," he says.

Contact Senior Writer Michael Martin

Other recent articles by Martin

Genome Project meets Gigabit Ethernet
Incyte fashions high-speed network to support historic scientific endeavor. Network World, 09/18/00.

Exodus expands metro Ethernet services via Telseon
Network World, 04/16/01.

The changing face of the 21st century carrier
Network World, 06/18/01.

Caution flags flying as CLEC woes mount
Network World, 11/20/00.

Metro Ethernet lets Yipes stand on its own
Network World, 10/16/00.