CENX Tackles Flow-Through Ordering and Monitoring, Gains New Funding

CEN Feature (Jun 26 2012) Managed Data Services , Mobile Backhaul , Wholesale / Exchange

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   Carrier Ethernet exchange operator CENX was the center of attention this week, announcing it had received $9.5 million in funding from Verizon Investments, along with Mesirow Financial Private Equity and current CENX investors DCM, Highland Capital Partners and Wasatch. But that wasn’t the only news from CENX.

   As CENX President Nan Chen explained in an interview, the company also has been busy setting the stage for what it sees as the next phase of the Carrier Ethernet exchange business – simplifying the ordering and monitoring processes for interconnected Carrier Ethernet circuits.

   The idea, Chen said, is to be able to “manage the entire lifecycle for Ethernet access.”

   Initially Carrier Ethernet exchanges focused on simplifying the network interconnection process. But Chen said CENX knew upfront that eventually it would need to simplify the ordering and monitoring processes. He added, however, “We didn’t necessarily know the full scope of the difficulty.”

   CENX now believes it has found a way to support flow-through ordering from one carrier to another.

   “We sit in the middle to translate,” explained Chen.

   Carrier customers, he said, also need to make sure they are meeting service level agreements – and that’s a complex process when a circuit is comprised of multiple segments from different network operators. Traditional TDM circuits were either up or down, but managing Carrier Ethernet circuits is considerably more challenging because a circuit may be functioning even though service may be degraded. With CENX’s solution Chen said service providers will be able to determine where in the network a problem is occurring so they can determine where they need to invest to address the problem.

   Some customers may simply want to use tools provided by CENX for network monitoring and troubleshooting, while others may outsource the entire process to CENX, added Chen.

   CENX already has customers using the ordering and monitoring capabilities, Chen said, and the company is in the process of rolling those capabilities out more broadly.

   Asked how CENX plans to monetize its new capabilities, Chen said, “We have multiple models” but added that he believes most customers will pay on a per-circuit basis using a software-as-a-service approach.

   Verizon already participates in CENX Carrier Ethernet exchanges, and Chen said he sees interest from that carrier in using the exchange approach to support backhaul connectivity as well as to support enterprise customers with multiple locations, including some that are not on Verizon’s network. Verizon also can use the infrastructure to sell its services to other carriers.

   The new funding announced this week will help fuel CENX growth, said Chen. Asked if the company would need to hire people to support the outsourced approach to monitoring, Chen’s answer revealed a high level of confidence in the company’s new options.

   “In an ideal situation everything would be automated,” said Chen. Technical personnel would be needed primarily to handle fallout and he doesn’t expect to need a lot of NOC technicians because he believes fallout will be minimal.

    

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