Feature Article

January 16, 2009

Looking Through the Cracked Crystal Ball

With the start of a new year we usually get inundated with a flood of predictions ranging from overly optimistic to doomsday scenarios. Sorting the wheat from the chaff becomes a challenge that few of us are up to. There have been quite credible arguments that the mobile industry as a whole is somewhat immune to the turbulence in the financial markets but no one can argue that the spending levels will trend down in most sectors over the next few months. What does all this mean to the middle mile segment of the mobile market?
The good news is that to a significant degree the backhaul segment is indifferent to the technology that is deployed on the edge. The hand-off to the backhaul is either in T1s, SONET or Ethernet and is independent of the radio access technology. The only interaction is the capacity demand, which is driven more by the applications than the RAN technology. The second observation is that the user demand for bandwidth will continue to escalate, and perhaps the rate of increase will in fact accelerate as more people are forced to try to find ways to increase their own efficiency. New applications to enhance visualization and remote interaction both in work and in play will demand greater and greater amounts of network traffic.
Together these two trends will determine whether the operator adopts a conservative, evolutionary strategy of enhancing his current network in response to the economic uncertainty, or whether the operator continues to pursue an aggressive roll-out of new technologies to solidify a market advantage over his competition, the backhaul market will see increased demand for high capacity IP centric technologies. The second impact of these two trends is that scalability, and linearizing the cost model so that costs track the capacity delivered, becomes increasingly important in order to maintain a positive business case in the face of uncertain demand. Finally, reducing the cost per bit remains the key objective of the network architects, as the user demand for the new services will definitely be there, but the ability to pay significant premiums will evaporate with each new downturn in the markets.
All of the above points make an even stronger case for packet-based microwave as the preferred technology for backhaul. The significantly lower up-front cost of microwave when compared to a fiber build out, coupled with the ability of some microwave products to offer software scalability (and a pricing model that is tied to the bandwidth delivered) means that the capacity demand can be met for a lower initial cost with packet based microwave than any other technology. Second the move to packet based technologies will also accelerate as these technologies can take advantage of statistical multiplexing, over-subscription and QoS management, and lower port costs — all of which are required to drive down the cost per bit demanded by the new services.
So looking through the cracked crystal ball we may only see dimly, since these are unprecedented times, however with whatever certainty we can muster we can say that the opportunity in front of the backhaul segment in general, and that for packet based radios in particular, is relatively bright. If any networks get built, backhaul wins. If any backhaul gets built, packet radio wins. So while I wouldn’t break out the champagne just yet I do believe there is a case for optimism amidst all the doom and gloom. Sometimes it is good to be in the right place at the right time.

Dr. Alan Solheim, Vice President of Product Management at DragonWave, is author of MobilityTechzone�s The Middle Mile column. To read more of Alan�s articles, please visit his columnist page.

Edited by Greg Galitzine

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