Tarazi (Image source: Verizon)
Ihab Tarazi, VP of Global Network Product Technology, Verizon (NYSE: VZ), last July took on another role as the chairman of the Metro Ethernet Forum (MEF). One of the major initiatives that Tarazi is driving at both the MEF and at Verizon is the emergence of the forum's Carrier Ethernet 2.0 (CE 2.0) standard. Following the recent MEF meeting where 20 telecom equipment vendors passed CE 2.0 certification, Sean Buckley, Senior Editor of FierceTelecom, caught up with Tarazi to talk about CE 2.0 and how it benefits the telco's domestic and global Ethernet initiatives.
FierceTelecom: You were elected as the chairman of the MEF last July. Can you start with what your goals for 2013 are and what influence the MEF has on Verizon and the overall Ethernet industry segment?
Ihab Tarazi: Nan Chen and I lead the strategy and all of the performance of the different teams, including marketing and operations. Our job is to lead the strategy and deliver to our members what they are looking for from certification to standards to innovation. We have a very good cross-functional team from cable companies to operators (including international providers), and equipment providers from the biggest to the smallest. It has been enjoyable because I knew many of them anyway before I joined.
I joined the MEF because the pace of innovation is accelerating, and therefore we need the MEF to deliver on a couple of areas. The first one is we need to significantly speed up the process of developing new standards so we can innovate on products faster. There's a lot more Ethernet capabilities needed for small cells, business products, and for the cloud, so we need to shorten the cycle and get the engagement of the global community to get the right standards out so we can develop products based on it. The second objective is, I wanted to simplify the process of operationalizing these things once they are done. Today, the process of setting up an External-Network to Network Interconnection [E-NNI] between two companies could take up a minimum of three to nine months. That's way too long for the hundreds of carriers we have to work with.
FT: One of the major initiatives that took place during the recent MEF summit in San Diego was that the forum, in partnership with Iometrix, confirmed that 20 vendors are CE 2.0 compliant. Do you see that as a big first step for CE 2.0?
IT: CE 2.0 would bring Quality of Service [QoS] and performance, a standard set of connectivity via E-NNI to the network, and some level of QoS so you can have differentiated services. The part that usually works is a standard is usually developed. After the standard is developed, then you want to certify the equipment providers, because then you'll know the gear will support it after a very rigorous certification process. Then you certify your service once the equipment is certified. All of the carriers are working on certification at different speeds, or at least some of the key ones are. Comcast (Nasdaq: CMCSA) was very quick to come out, which I am very happy with. They're also an important partner for many people and a key part of the MEF.
We are working on our certification. Because we have a complex set of global products we are working in the order by which we want to certify these products. With the global nature of our network, we have a set of vendors that we need to work through and different capabilities. We just have more products and are more global in nature so we're being very deliberate about CE 2.0 certification, which will happen before the middle of this year.
FT: How will an E-NNI standard help carriers like Verizon, which already has various E-NNI arrangements in place, drive more efficient interconnection?
IT: Today, we have a few hundred Ethernet interconnects already, because we provide Ethernet access to our business services everywhere. All of these relationships took us a while to develop in terms of setting up those NNIs. As all these partners and vendors we have innovate to come with new capabilities that may have QoS, oversubscription or others, we have to innovate on the product for the next set of Ethernet capabilities.
People who have CE 2.0 will be a lot faster and easier for us to do because know exactly what they have and know exactly what capabilities they have and what certification they passed that guarantees the performance. In a way, it skips a bunch of the guesswork that we have to do manually today. When we know somebody is CE 2.0, we have a certain set of information and reliability data that we can skip and focus on the specific features of the products we're looking for. It shortens the process, creates a lot of reliability, and speeds up the whole thing for the customer.
What we're working on next is creating an operational team so that we can also limit the variants of the implementation of CE 2.0. As we limit the variants, we can simplify the process. We have plans in progress to simplify this thing dramatically so it can be done in weeks instead of months.
FT: Speaking of certification, can you talk about the process Verizon is taking to get its products CE 2.0 certified?
IT: We haven't announced which products we're going to certify yet. The two big ones we're looking at is our regional Ethernet product, which we call switched Ethernet, using our fiber in the Northeast and the Mid-Atlantic states in the U.S. That's a very dense Ethernet network. The other one is global Ethernet Virtual Private Line [EVPL] and Virtual Private LAN Services [VPLS]. We have a few more than that, but we are starting with these two. I don't know if we need to certify by region or certify by the globe because it's the same equipment. One of them is a global switched product and the other is a regional product. We're looking to certify both of those, but we have not decided on the exact timeline for those two services.
FT: Besides the retail opportunity, Verizon is a major wholesale player. Will CE 2.0 help the wholesale Ethernet opportunity as you sell off-net circuits to other service providers?
IT: Absolutely. That's where the regional product benefits us the most, because it is sold to a lot of service providers in our territory. A lot of customers are looking for that CE 2.0 in the future. That's a high-growth product that people use for Fiber to the Tower [FTTT], business customers, and for many applications including data centers. It's definitely going to be beneficial as a seller when we get CE 2.0.
Our plan is to continue to stay compliant and certify all of these services that we have regionally. When it comes to the global product it's mainly business customers who buy it, and some of them are familiar enough where they want to know about the certification, but not everyone. It is not as heavy a requirement as it is for the service provider segment that buys our regional product.
FT: Do you think Verizon's global Ethernet reach is a key differentiator?
IT: Absolutely. What happens with the phase we're at now, is that a lot of people who use MPLS globally are now using it more extensively, but also there's a new set of people who want to transition to global EVPLS and VPLS. We're seeing not only continued use of global MPLS, but we're also seeing people moving from private line circuits to global EVPLS and VPLS.
Most of them need the scale, quality, and the QoS that usually comes with a product that's CE 2.0-certified to manage applications on the backbone between the data centers. I would say that Ethernet continues to be a high-growth product everywhere: globally, regionally for all of the providers, and Verizon is no exception. Going to 2.0 means you have more features and capabilities. Think about small cells, which will need another level of performance and differentiation for these services.
FT: You mentioned Fiber to the Tower and the small cell opportunity. Do you see an increased need for Ethernet-based wireless backhaul in the small cell space?
IT: For the last two years there was a lot of focus on the macro cell, and the macro cell is the big towers that you see. Now, we're seeing people in the industry starting to put in smaller antennas to cover spots or more dense areas like malls. It has not started in a big way yet, but it's definitely the wave that's coming up next. For those, it's more cost effective for them to use a switched service like CE 2.0 versus for some of the macro cells they would want [for] big pipes and massive capacity. They can get a lot more efficiency and a more cost-effective solution when you go to the smaller sites.
What's happening is if a wireless backhaul customer had SONET, they are moving to Ethernet for the macro cell and for the smaller ones they are moving to Ethernet directly. The market is definitely developing and evolving for everybody there. Also, people who used TDM circuits like T1s or DS3s continue to look at the next solution as they up their speeds.
As people use more applications at their sites like Salesforce.com, you're going to need a lot more capacity back to the cloud, and Ethernet is the ideal solution for that. Once those people start to go to the cloud at those offices, they're jumping from TDM circuits to big-pipe Ethernet services.
FT: As the interconnection market evolves, do you see an increasing role for Ethernet exchanges and colocation providers playing in this ecosystem? Why?
IT: I see that they have a role for sure. On one side, the standards are helping clean up the complexity of Ethernet. We're doing that at the MEF and we'll continue to optimize that area. There's also a software development piece to the actual exchange model. What I mean by that is, what documents [are] exchanged between service providers and how to ensure the quality of the data.
In a TDM world, you may have to exchange 20 or 30 fields, but in Ethernet that number has almost quadrupled, since now you're not just dealing with the pipe, but also the services on top of it. Software advancements that automate how people order from each other and troubleshoot is definitely needed in the industry, and I see CENX working hard to fill that gap. We are working with CENX on that.
As you know, we are an investor in CENX. I think the opportunity is not software as they portrayed it, because that is much more complex than the hardware piece. CENX is just one of them. I am sure there will be others in the field of software exchanges, and software delivery--maybe not in Ethernet, but in everything--will continue to evolve. A number of companies I know are attacking that whole process of how to make that customer experience much better.
FT: In terms of what's next, there's a lot of talk about 100G Ethernet. How will that evolve?
IT: We already have 100G in our network. We're not offering it as an external service yet, but we have that capability coming in the network. You're going to need 100G in the next year and a half to support cloud for Ethernet.
When you need the scale of the cloud and the ability to do dynamic bandwidth, you're going to need a bigger pipe, and we're well on our way to having that ability in the network. We believe that CE 3.0 will start to attack the cloud nature of Ethernet, but none of that is fully defined at this stage.
Our focus is really to get CE 2.0 out and get the certification in place so that we can accelerate the adoption of Ethernet and improve the process of how fast we can implement it and how much capabilities we can get to customers.