Hitachi Cable Brings Carrier Ethernet Stateside

Hitachi Cable Ltd. is ready to give the U.S. Carrier Ethernet market another go.
It's been about five years since the company first thought about marketing its Apresia switch in North America. Now, with more widespread fiber connectivity in the country, the vendor feels it's time to try again, says Vice President and Executive Officer Tetsuro Mikami, who spoke with Light Reading at Ethernet Expo this week.
And Hitachi Cable has a gimmick: Apresia purely targets Carrier Ethernet over fiber. No copper, no Sonet/SDH heritage -- not even MPLS.
The catch then, is that if the market doesn't have a lot of fiber, Apresia doesn't have much of a play. And that's what's kept Apresia away from U.S. shores.
"I saw a Vertical Systems Group report at that time, saying the fiber coverage of offices with more than 20 employees was less than 14 percent," Mikami told Light Reading. Now, it's more like 32 percent; that's not as high as in Japan, where Mikami swears the number is a perfect 100 percent, but it's a healthier market for Apresia to tackle.
So, Mikami has been spending time in the U.S., talking to carriers and gathering up market research. He's a 30-year veteran of NTT Group (NYSE: NTT) and knows he's up against a lot of competitors, mainly Cisco Systems Inc. (Nasdaq: CSCO), that can "educate" the market -- and the market research, he says -- towards or away from a particular point of view.
Case in point: "MPLS is a very obsolete technology in Japan already, but in the U.S., carriers are focusing on MPLS. They are very far behind Japan," Mikami says.
Mikami isn't an MPLS guy; he's a Carrier Ethernet guy. He claims to have cooked up the concept -- similar ideas, different name -- while at NTT in 1997, as the carrier was looking for ways to market its dark fiber. He recommended lighting the networks and upgrading the central offices to data centers -- thus doing something with the space saved in changing to digital technology from analog. In building the resulting data network, he recommended bypassing expensive routers, relying on MAC addresses rather than IPv4.
He's hoping the simplicity promised by Apresia will be a draw. It's built to avoid the added expense of Layer 3 routing, of non-carrier Ethernet and of non-fiber access. Now Mikami just has to find carriers with that kind of fiber obsession -- or convince them to start looking in that direction.
"If you invest in only fiber-optic switches, you can invest in just pizza boxes," Mikami says.
Apresias are being used by NTT Docomo Inc. (NYSE: DCM) for backhaul, Mikami says. It's also being used by at least one large carrier for virtual private network (VPN) services; Mikami won't say who, but let's face it, a really obvious guess is NTT Group (NYSE: NTT).
"There are a couple of Japanese Carrier Ethernet routing and switching vendors -- Hitachi Cable, and Alaxala Networks Corp. as well, and this goes back five or six years -- that have at one time or another expressed curiosity about the U.S. market," says Shin Umeda, an analyst with Dell'Oro Group . "They've had a hard time finding a way to get in."
Another name on the list would be NEC Corp. (Tokyo: 6701), which wants to expand outside Japan (where it's supplying NTT) by using OpenFlow as a lever.
"These things go up and down," Umeda says. "If they're doing OK in Japan, they don't bother to look outside unless things wind down or they see an opportunity."
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