For all of his accomplishments during his 15-plus year career at AT&T (NYSE: T), Sandy Brown's legacy will clearly be connected to the success of the service provider's Carrier Ethernet offering. After helping to make AT&T's Carrier Ethernet a household name, Brown decided to take on an entirely new challenge by becoming the CEO of Ethernet exchange service provider CENX . FierceTelecom editor Sean Buckley caught up with Brown to talk about his recent move and his thoughts on how the Ethernet exchange will help simplify the service provider's ability to conduct future Ethernet interconnections.
FierceTelecom: Sandy, after a 15 year-long run at AT&T--a company where you helped most recently pioneered their Carrier Ethernet offering--you decided to leave and join CENX. What drove you to make this move?
Brown: To be frank, it was a pretty big decision for me. I had been working in what I still believe was the world's best communications company. I had a great position there; we were growing and had a big market impact there. But in some sense I had been to that movie many times. I was ready for a new challenge and thinking what I wanted to do. CENX presented itself, and it was a really unique opportunity from my point of view. First of all, maybe at the core of it was the vision Nan and the gang laid out.
I believe in communications, and this notion of creating a more interconnected and easier to interconnect world has enormous value. This notion that I could work in an area I believed in, and particularly the Ethernet part of communications, could change the world in a big and positive way. It's a great team and we get to swing through the fences and make something big happen, I figured, why not? This is not a one-dimensional decision, but rather a multi-dimensional decision, but in this case all of the dimensions were right.
FierceTelecom: The Ethernet exchange market, while compelling in terms of the purpose of helping to take some headaches out of the carriers' drive to expand their market through interconnection, is still a relatively new market. How do you see the Ethernet exchange market playing out and what do service providers like CENX bring to the table?
Brown: Here's my point of view on this. If I start from the beginning, carriers exist to provide communications services to their customers. Carriers, by their definition, would like to sell services on their own assets. That's how they make money and how they feel safe. Inevitably, and this is true for every carrier I run into, there's some situations where the customer's locations and their own network don't match. The question is how do you serve those off-net locations? Carriers want to do that in a way that's efficient, practical, effective, economic and manageable and all the good business things. This is because they are taking on responsibility for a third-party network as they try to serve their customer in a total service way. The traditional way had been through a direct connection. In the SONET/SDH world, that's what we do all day long, and that's how carrier hotels grew up so people could serve the off net locations.
Ethernet, for all of its strengths in terms of scalability, flexibility, economic attractiveness and manageability has some challenges in doing that. On the economic side, the real practical way to interconnect Ethernet is at 1 and 10 Gbps speeds. People tend to use this stuff at 10, 20 and 100 Mbps chunks, so there are economies of scale in sharing that asset at the connection fabric. There's also the problem that when you go to make that interconnection, Ethernet has a lot of knobs and dials so you have to go through a certification process and that can be expensive and time consuming if you're dealing with a new carrier or a smaller carrier. The exchange model allows that to be done once and shared across multiple across multiple customers. You get to lower the cost of certification and once you're interconnected you get better scalability and use of that infrastructure. When you do that you end up with the highest common denominator interconnection. Finally, exchanges allow a higher level of manageability than direct connections typically do.
I sit there from a carrier's point of view and think I have this POP and need to serve off-net locations and what is the best way to go about doing that. The answer is there is direct connect or an Ethernet exchange. When you sit down and do a side by side comparison, there may be some situations where a direct connect makes a lot of sense, but for a large chunk of the business I think the exchanges are going to be the most cost effective way to provide that off-net capability. Just to put the icing on the cake, you can see a couple of other ways that exchanges will help carriers.