BT Cranks Up SANs on the MAN

Seeking to tighten its grip on the SAN extension market, Nortel Networks Corp. (NYSE/Toronto: NT) announced today that it has sold British Telecommunications plc (BT) (NYSE: BTY; London: BTA) DWDM equipment to extend SANs over metro-area networks (MANs) (see BT Deploys Nortel for SAN Service).

Nortel, which, according a recent IDC report, held 45 percent of the SAN connectivity market in 2002, didnt reveal the size of the deal or any financial details.

The companies cite growing customer demand for SAN connectivity for prompting BT to enter into the deal. BT's broadband point-to-point data networking division, Short-Haul Data Services (SHDS), will use Nortel’s OPTera Metro 5200 Multiservice platform to expand its Wavestream Connect service to include enterprise SAN and cluster services.

Today’s announcement is part of an ongoing trend of enterprises moving away from building and operating these networks themselves, instead opting for a service provider to handle it, says IDC analyst Sterling Perrin.

"We’re seeing more and more that [enterprise users] don’t want to run these networks on their own... The WDM equipment is very complex," he says, pointing out that when enterprises first started looking for these capabilities, service providers hadn’t climbed on board yet. "Now they’re contracting with a service provider for a managed service."Analysts say European carriers have been more aggressive at rolling out storage-over-optical services than those in North America. But this may be starting to change. For example, last month AT&T Corp. (NYSE: T) introduced a new portfolio of storage-oriented services designed for business continuity (see AT&T Puts Hands on SANs).

BT has already started deploying Nortel’s equipment to offer the Wavestream Connect service to a large financial institution, according to today’s announcement.

Companies using the service connect their LAN, WAN, or SAN equipment into Nortel’s OPTera Metro 5200 gear, which will sit at either end of a dedicated fiber optic link. In addition to SAN connectivity, BT’s SHDS Wavestream Connect service allows for the interconnection of Ethernet, ATM, Sonet/SDH, and video services that can run at up to 2.5 Gbit/s.

The British carrier says that Nortel’s close relationship with leading storage vendors was a deciding factor in its choice of vendor (see Nortel Cozies Up to Brocade and EMC Goes the Distance).

Although Nortel currently rules the SAN connectivity market, it isn’t the only kid on the block. ADVA AG Optical Networking (Frankfurt: ADV) is very strong in SAN extension as well, Perrin says, adding that this company is also aiding BT with its SAN connectivity project.In addition, a long line of other vendors attacking this space include: Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Ciena Corp. (Nasdaq: CIEN), Cisco Systems Inc. (Nasdaq: CSCO), Internet Photonics Inc., Lucent Technologies Inc. (NYSE: LU), and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA).

While the two companies aren’t revealing many details of the coming deployments, Perrin says they will probably remain on networks largely dedicated to a single enterprise to begin with, but carriers like BT will probably launch more shared network services going forward. "Where the service providers want to go over time is to more of a shared network," he says. "That would be much more of a leap for the enterprise."

— Eugénie Larson, Reporter, Byte and Switch