AboveNet CEO Bill LaPerch Cited in Capacity Article Discussing Role of Ethernet In Current and Future Economy

Quotes appeared in September, 2008 issue of Capacity magazine’s annual guide to North American metro providers www.capacitymedia.com

Bill LaPerch, was quoted extensively recently in Capacity magazine, a leading publication in the telecommunications industry.  The article, written by Guy Matthews, emphasized that the underlying drivers of demand for metro services are still in place, with the market focused on how to capitalize on the growing opportunity within the current economy.

Bill LaPerch was quoted as saying, “Most of last year’s predictions about this market have been borne out, and I think it will continue in the same vein for the foreseeable [future], notwithstanding global macro economic conditions.”

LaPerch went on to say, “These conditions aren’t affecting our customers’ bandwidth needs. The growth rate in the amount of data they are networking has not changed.” LaPerch believes that anticipation of recession might actually be playing into the market’s hands. With companies looking to become more efficient in tougher times, migrating from TDM to new Ethernet platforms, with its lure of greater simplicity and value for money, is an obvious step. “Perhaps the issue for some is - do they have the capital to make that migration?” he asks.

The article indicated that US Metro players like AboveNet “…are looking forward to the future with confidence despite the uncertain economic conditions.”

DEMAND FOR ETHERNET INCREASING
The Capacity article indicated that the growth in demand for US metro Ethernet is expected to continue to grow – from now until 2013, with some parts of the market growing more dramatically than others. Ethernet demand is rising, being driven by enterprises, wireless providers, content providers, and cable companies.

As the article stated, “This raises the important question of exactly what type of company is best positioned for success, based on current market prospects.”  LaPerch responded, “I think both local and large players have the potential to be successful.” “Tier ones have deep pockets and breadth of products, while the tier two or threes can do well if they are quick and flexible and offer a high quality of service. Then they can compete. You need, however, to be facilities-based, and not buying from a whole lot of other suppliers.”

WHO WILL SUCCEED?

The article suggest that the “advantage in the metro sector ultimately goes to the company that can extend fiber to where businesses need it.”

OPTICAL FIBER CRITICAL FACTOR

As enterprises and society at large experience exponential growth of data and voice traffic, future communication needs will increasingly require underlying bandwidth capacity to provide robust, scalable solutions.  The article indicated that one limitation on this goal is that “there is less fiber made available each year as infrastructure operators attempt to conserve existing capacity and retain control over more of the projected bandwidth growth.”

LaPerch agreed that, “Cost-effective WDM solutions running on fiber are an important part of meeting the market’s needs.” He said, “When it comes to the protocol, it’s Ethernet these days.. We just need network-to-network connectivity between Ethernet networks to speed up, which means the industry needs to press the accelerator on standards. I’d like more urgency. It’s the old issue of the engineer versus the sales guy and their different priorities.”

CONSOLIDATION?

LaPerch sees the next year leading to continued market consolidation: “A lot still needs to happen, especially at the mid-tier,” he says. “Consolidation can make sense from a geographical perspective, among others. It’s about who is best positioned.”

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