4 Support of Carrier Ethernet Attribute??”Reliability
510 Chapter 16
Economics Ultimately, economics is one of the key considerations driving a decision
on which solution to use. While this typically encompasses several direct factors such
as revenues, costs, profitability, and indirectly, factors such as the speed to market, strategic
opportunity, opportunity costs, and so on, the high-level assessment in Table 16.8
is restricted to the total relative cost of delivering Carrier Ethernet services (captured
as Total Cost of Ownership or TCO).
The initial cost (typically, the CAPital EXpenditure or CAPEX) and ongoing costs
(typically, the OPerational EXpenditure or OPEX) are the two major components associated
with the TCO. In several of the commercial solutions (SONET, TDM, HFC,
Copper, et al.), these costs are typically overstated from the standpoint of delivering
Carrier Ethernet services because they usually encompass the cost of delivering non-
Ethernet services as well (i.e., the costs incurred by Carrier Ethernet and non-Carrier
Ethernet services are shared). From the standpoint of CAPEX, the same platform solution
is usually employed (albeit with minor additions like interfacing cards, etc.
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