Industry Spotlight: CENX’s Nan Chen

Ethernet based products have seen rapidly accelerating growth across the sector over the past several years, which has in the past three quarters led to the public unveiling of a new business entity:  the Ethernet Exchange.  The first such exchange to go live was CENX, and the company has since reported rapid growth in the breadth of the total endpoints available to its partners.  With us today to help illuminate the subject is Nan Chen, who as President of CENX and founding President of the Metro Ethernet Forum (MEF) has long been at the forefront of this phenomenon:

TR: Carrier Ethernet exchanges are still at an early stage of development and adoption.  Where do you see the technology headed down the road?

NC: As Carrier Ethernet becomes the dominant technology and service for the world of telecom and Internet, grand vision of Carrier Ethernet Exchange is they become global interconnect points for all data, video and voice worldwide, which enable on-demand, real-time, cos-assured communications between any Carrier Ethernet end-points in the world, much like nature of service today’s telephony tandems deliver, but at multiple magnitude higher bandwidth. Frankly, in this rapidly changing transformation, there’s no such thing as being early; you are either on time or late; we know, based on our rapid growth, we were on time.

TR: How does CENX differentiate itself from the competition in today’s marketplace?

NC: CENX is the market maker, in terms of thought leadership and first mover advantage,  and the market leader, in terms of number of Ethernet Service Locations (ESL) accessible via CENX, more than 10m and growing. The reasons that we have built the lead and continue to widen it are following:

First, it’s People; CENX, in my view, has one of the most talented team in the industry, whether we are talking about industry leadership, Carrier Ethernet expertise, system development or operation excellence. I am also confident that we are the largest company in the space as no other firm is even close to the quantity of people at CENX working to meet the Carrier Ethernet interconnect challenges. CENX’s unique heritage has yielded special bonds with service providers worldwide, who know and trust the people of CENX, and understand their commitment to industry success.

Secondly, it’s Focus; CENX has exclusive focus on our service provider members, delivering world-class experience. We are carrier-neutral and  colo/data center-neutral.  We don’t compete with our service provider members for their enterprise customers or their long distance services (e.g. interconnecting exchanges) or cloud computing services – we’re 100% focused on helping carriers, not competing with them.  This is all we do; we get up every morning with the singular vision of making CENX the greatest Carrier Ethernet Exchange in the World.

Thirdly, it’s Service; CENX has a very real different philosophy regarding Carrier Ethernet Exchange. While most of others (like Equinix and TelX, use exchanges as a way to pull through space and power revenue in their colo space or defend their current transport revenue stream, like Neutral Tandem, CENX, on the other hand, focuses exclusively on delivering a rich degree of end-to-end exchange services for our carrier members. We not only virtually-cross-connect our carrier members, but we also provide translations, monitoring and process integration services, which are all required to achieve the grand vision of Carrier Ethernet Exchange outlined above.

Because of the team, the focus, and the service philosophy, I am confident CENX will continue to lead the market.

TR: Many fiber-based operators prefer to stay on-net as much as they can.  Does an Ethernet Exchange make it more attractive for them to go off-net more as well, or is there a natural division between buyers and sellers at an Ethernet Exchange?

NC: You are correct. Operators generally prefer to stay on-net not just for cost-effectiveness of delivering Carrier Ethernet services but also for lack of visibility when off-net.  However, since no carriers have ubiquitous coverage, they have to go off-net in order to complete services for their customers. With more than 10m Ethernet Service Locations (ESLs) accessible via its exchanges and industry-leading off-net SLA monitoring capabilities, CENX enables carriers to deliver their on-net experience off-net. On the wholesale side, for those carriers with facilities others want to access via CENX, CENX is a great sales channel for worldwide buyers. In general, all providers would be both buyers and sellers via CENX, as they need to go off-net via CENX and seek to sell their on-net assets via CENX.

TR: CENX has nodes in Europe and the United States, which of course hold the bulk of the market opportunity.  At what point will nodes in places like Asia, South America, Australia, and even Africa come into play?

NC: CENX’s London exchange is operational as of last week, another European exchange is being built. By the end of July, CENX will also be opening its first Asia exchange in Hong Kong. In August we also open Miami, which is of course a hub for South America.  Frankly, the as MEF participation has shown, the market for Carrier Ethernet is even more robust outside of the US than domestically.

TR: What is the greatest hurdle still facing CENX and other Ethernet Exchanges?

NC: For CENX, there are two major challenges:  First, we have to continue to deliver the world-class customer experience and operation excellence our members expect as we continue to grow rapidly; second, we must replicate our initial success worldwide and scale the business globally to deliver ubiquity. For both these reasons, this is why we added Sandy Brown, our new CEO, and Tony Thakur, our new EVP of Operations and Engineering.  They bring the experience to manage the sharp growth we are facing.

For the industry generally, all Carrier Ethernet Exchanges must exchange Carrier Ethernet services as defined by the MEF among interconnected carriers. Carrier Ethernet services are defined by MEF as Ethernet plus five carrier class attributes: Reliability, Scalability, Standardized Services, Quality of Service, Service Management. All Carrier Ethernet Exchanges must be able to deliver these service attributes between carriers, not resulting in the lowest common denominator of services when services are exchanged.

TR: You have been involved in the development of Carrier Ethernet as long as anyone.  Has it taken longer than you thought it would to reach this stage?

NC: Yes and no, it’s certainly been an long time to trigger this global domination wave it is on, but it has been an exciting journey of Carrier Ethernet’s creation, standards, certification and now interconnect.  Next year is the 10 year anniversary of founding of MEF.

TR: Thank you for talking with Telecom Ramblings!

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Categories: Ethernet · Industry Spotlight