(Service Provider) Economics The economics of Service Providers with respect to offering
new/emerging applications (discussed above) will be a key driver or impediment to
the demand for Carrier Ethernet services. Service Providers, in order to be competitive,
will invariably have to optimize their delivery (i.e., network) infrastructures especially
given the intense competition (discussed below) and the inherently lower revenue/bit
to be expected in future applications (at least as compared to traditional telephony
applications). To remain profitable (their primary reason to exist), they must reduce
their fundamental cost structure to deliver these applications. Carrier Ethernet for
reasons discussed in Chapter 1, provides a very compelling solution, and thus will
likely be the candidate of choice. While the exact specifics of a Service Provider??™s underlying
delivery infrastructure depends on a complex set of variables (discussed later
in this chapter), the Service Providers will nonetheless likely introduce an independent
Carrier Ethernet layer that can support a broad range of applications delivery in a cost
efficient manner.
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