Verizon FiOS tech heading to enterprises

Claims new high-speed optical networks slash floor space, electricity needs

Verizon Business has quietly developed an enterprise version of its popular residential FiOS high-speed Internet service.

Verizon Business has quietly developed an enterprise version of its popular residential FiOS high-speed Internet service that could save companies a bundle on energy costs.

The corporate grade "service," initially designed for the U.S. military, involves installing the same passive optical network (PON) gear used for FiOS in office buildings and corporate campuses (it's unclear yet whether the offering will also one day be delivered as a managed service). It will be marketed to federal, corporate and university customers beginning in 2009, Verizon officials say. Ideal customers are those with high bandwidth demands, such as for sharing CAD drawings, streaming video or real-time workgroup collaboration.

The first installation is in a new, four-story office building in Annapolis Junction, Md., that was designed for military contractors and will be ready for occupancy in September. Verizon has been working with systems integrator Science Applications International Corp. (SAIC) for two years to develop the PON offering. Verizon is a subcontractor to SAIC for the network inside the new Washington, D.C.-area office building.

Diagram of how Verizon Converged-Fiber-to-the-Desktop would help save enterprises space and power usage

Both companies plan to sell the PON system, which supports familiar network protocols such as Gigabit Ethernet. Verizon calls its new corporate-grade product Converged Fiber-to-the-Desktop (CFttD), while SAIC has dubbed its version Secure Converged Solutions (SCS).

Both new products are based on the same Fiber-To-The-Premises (FTTP) technology as  FiOS, which is what Verizon calls its residential broadband service that offers Internet, telephone and TV service sent over a fiber-optic network. On April 28, Verizon reported a total of 1.8 million FiOS Internet customers and 1.2 million FiOS TV customers. 

The new fiber-to-the-desktop offering sounds too good to be true. Verizon officials say it cuts floor space and electricity usage in office buildings by as much as 95% compared to traditional copper networks. It requires half the upfront equipment investment and installation time, and it promises easier ongoing operation and maintenance because it has fewer moving parts, they say.

``The nice thing about a passive optical network is that the fiber sits in there and it has tons of excess capability for your future. It can support you even if the equipment on either end changes over time,’’ says Ed Hill, director of technology and operations for Verizon Business’ Federal Network Systems.

Industry watchers say the offering sounds promising.

``The ability to reduce power constraints in wiring closets with PON is a definite plus of the technology,” says Phil Hochmuth, senior analyst with Yankee Group. “It's an exact reversal of the trends going on in wiring closets in enterprises over the last few years. More power and more heat are going into places that were never meant for that much power. A wiring closet in some enterprises consumes as much power and generates as much heat as a small data center did 10 years ago.''

Military roots

Verizon says it came up with Converged Fiber-to-the-Desktop to meet the demands of the U.S. Defense Department, which is struggling with base realignment, tight IT budgets and maxed-out power grids.

``Over the last two years, in the Washington, D.C., metro area there has been a growing concern about military build-outs, a whole series of base-relocation issues, and a big concern about where the power is going to come from,’’ Hill explains. ``Some of the Defense customers I work for have had power outages to the point where they have to retire a system before they can put in a new system.’’

Verizon’s Hill says military officials challenged the company to come up with a network technology for its buildings and campuses that would meet its bandwidth requirements for the next 25 years while reducing power usage.

``We started looking at how Verizon was addressing this in people’s homes with FiOS, and we said this fundamental architecture works for an office building, too,’’ Hill says.

A key advantage of Verizon’s Converged Fiber-to-the-Desktop is that it is built on FiOS technology tested as far back as the mid-1990s.

Chart of pros and cons of fiber to the desktop

While Verizon primarily uses equipment from Motorola for its FiOS service, similar customer premises equipment is available from Tellabs, Nortel, Ericsson and others.

The fiber-to-the-desktop offerings developed by Verizon and SAIC are geared toward new buildings and campuses and major renovations. These installations replace traditional copper Category 5 or Category 6 cable with fiber-optic networking, which has higher bandwidth and costs less.

The price of copper wiring ``is astronomical,’’ Yankee Group’s Hochmuth says. ``It used to be that installing fiber was harder to do and took more time than copper because you needed special equipment to terminate it. But if the ratio of lines you have to pull is that much less, I can see that the fiber installation might be less than copper, too.’’

He predicts fiber-to-the-desktop offerings will be popular with federal customers. ``Fiber has always been attractive to the government for security reasons because you can’t tap it,’’ he says.But such products may not be as attractive to organizations that don’t own their buildings, Hochmuth says. ``It could be troublesome if a company tries to roll this out in a building where they are not going to be for the rest of their lives. When you wire a building for anything other than Cat5, it’s like trying to sell Betamax to somebody. Copper is the standard.’’

How it works

The new fiber-to-the-desktop offerings from Verizon and SAIC originate at the data center, where a piece of equipment called an optical-line terminal resides. From this box, fiber-optic cables carry light-based communications through distribution hubs, which then split out individual fibers to end users. Each end user has an optical-network terminal, which is about the size of a cable modem, to support a PC and digital telephone. (See how Verizon's Converged Fiber-to-the-Desktop offering works.) 

Verizon’s Converged Fiber-to-the-Desktop as well as SAIC’s SCS provide 2.4Gbps of download capacity and 1.2Gbps of upload capacity.

Both offerings reap major savings in electricity usage because they eliminate the need for workgroup switches and repeaters to carry communications between the data center and the end users, Verizon and SAIC officials say. The only power required is for the optical-line terminal in the data center and the optical-network terminals at each desktop.

``Nothing between the end user and the wiring closet is powered at all,’’ says Blaine Overstreet, lead systems engineer on the Annapolis Junction building for SAIC, which touts a minimal electricity savings of 80% with its service. ``We use a single fiber to each user. The optical-network terminal takes only a 9- or 12-volt transformer.’’

Since less hardware is required, these fiber-to-the-desktop set-ups need less floor space in a data center as well as smaller wiring closets on every floor of an office building.

“[Racks of equipment] that normally took up 15 feet are now compressed to one foot,’’ Hill says.

These offerings also eliminate the need for wiring closets on every floor of an office building.

`` Now that’s rentable space.,’’ Hill says, pointing out that this is a big advantage for office building managers such as Boston Properties and Konterra, which are developing the Annapolis Junction building. ``You don’t need an 8-by-8 or 10-by-10 room to house switches or UPS.’’ 

Hill says fiber-to-the-desktop systems should reduce network administration costs because they are software based and can easily handle adds, deletes and changes. Similarly, operations and maintenance costs should be lower because less hardware is required.

``Overall, you’re saving money because the in-between hardware -- the switches and repeaters -- are going away,’’ Hill says. ``The hardware cost is 50% to 65% of a traditional solution.’’

Hill says buyers should see reduced network-installation costs, too.

``If we were doing a job with traditional copper, we would plan on two-and-a-half weeks,’’ Hill says. ``With this solution, we plan on one week. We can cut the installation time in half.’’

``There are huge savings in administration,’’ Overstreet adds, pointing out that network administrators no longer need to manage or operate workgroup switches. ``This can be deployed in a campus environment. You can have seven miles between buildings and this can all be managed centrally from one network operations center.’’

Pricing unavailable

The prices for Verizon’s Converged Fiber-to-the-Desktop and SAIC’s SCS offerings are not available. Verizon says it should have a rough price per desktop by the fall.

Experts agree that it isn’t economical for most businesses to rip out their existing cable network infrastructure unless they are already doing a major building renovation. That’s why these offerings are being aimed at new office buildings or building renovations with 300 or more employees.

Another drawback is that the IP phones used in these applications won’t work if the power goes out.

``The only negative we see is power over Ethernet,’’ Overstreet says. ``As people deploy VoIP in their enterprises, they are primarily using power over Ethernet. In this environment, with no workgroup switches, it’s all being fed from a small, lower-powered optical-network terminal. You do have to have locally powered devices like IP phones. . . . If the power goes out, employees are going home.’’

That’s why SAIC recommends that each tenant in an office building has an emergency phone with battery backup.

In addition to deploying Converged Fiber-to-the-Desktop at the 800-person, multitenant Annapolis Junction building, Verizon is converting three of its own buildings to the technology. These include a 50-person engineering lab in Columbia, Md., a 500-person facility under construction in Hanover, Md. and a 100-person engineering facility under construction in Ashburn, Va.

SAIC hopes to increase its corporate business with its SCS offering. Only 7% of SAIC’s sales are to commercial industry, while the remaining 93% are to government, primarily the U.S. military.

``We’re looking at the government market. We’re looking at maritime. We’re looking at any place where the movement of larger and larger amounts of bits is an issue, such as the medical industry,’’ McGaughey says. ``With this technology, you are cutting down on power, space and cooling requirements, plus you’re giving a pipe to bring in so much bandwidth that we can hardly fathom it . . . and it’s all centrally managed.’’

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Copyright © 2008 IDG Communications, Inc.