2016 Ethernet Platforms & Strategy on LinkedIn

© 2014 Level 3 Communications, LLC. All Rights Reserved. Proprietary and Confidential.

Marva BennettEnterprise Account Manager

(512) 431-6390Casey Dodson, Sales Engineer

Ethernet & Waves Roadshow

© 2014 Level 3 Communications, LLC. All Rights Reserved. Proprietary and Confidential. 2

Hybrid IT Trends & Opportunities


Next Generation IT Hybrid Cloud & Networking is changing the landscape of Enterprise IT and opening opportunities for Level 3 to steal share

3

WAN

HISTORICALLY, IT Applications and Data were stored on owned servers/storage in private datacenters connected with Frame/ATM & IP-VPN• AT&T, Verizon, Sprint dominated along

with equipment vendors (HP, IBM, etc)

HYBRID IT – Tomorrow’s IT Applications will combine legacy infrastructure and Cloud agility• Azure, AWS, Google, SalesForce.com steal

server/storage share • Level 3 steals network and security share as

traditional IP-VPNs move to a mix of Ethernet, Internet, Cloud Connect and Security

HQ/Datacenter

Branch

Branch

Cloud Providers

HQ

Datacenter

WAN w/ Ethernet &

CloudConnect

Datacenter Datacenter

© 2014 Level 3 Communications, LLC. All Rights Reserved. Proprietary and Confidential.4

Hybrid IT Adoption Survey

Enterprises already running in the cloud Enterprises investigating or planning/ implementing the cloud

30%

34%

Back-office apps like BCDR, storage, compute, ERP hosting, Office 365

Public apps like web sites and mobile apps

66%

48%

Back-office apps like BCDR, storage, compute, ERP hosting, Office 365

Public apps like web sites and mobile apps

Source: Level 3 Cloud Migration Survey; 2014


The Application Driven Network Customer apps, both internal and external, are driving them to rethink their network architecture. Our GOAL should be to understand those apps, their performance requirements, and how we can provide a transformational solution based upon those findings.

Requirements

Virtual Desktop

Gaming

Applications NetworkProperties

Latency

BandwidthFinancial Processing

Dev Ops

Archive/DR Apps

Imaging Apps

Video Streaming

Performance

Security


Level 3 Cloud Connect Solutions Overview

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What is Cloud Connect?

A private network ecosystem which leverages Level 3’s Private Network services to provide enterprises secure, high-performance, pre-established

connectivity to leading cloud services and data centers.

IMPROVED PERFORMANCE

Deliver cloud-based mission critical apps quickly and without interruption

GREATER SECURITY

Private connections to CSPs to help minimize threats, portfolio of security services to protect against them

GREATER EFFICIENCY & FLEXIBILITY

Choose cloud services that meet your needs with the ability to fluctuate network and bandwidth requirements on demand using Dynamic Capacity.

GLOBAL CONNECTIVITY

Connect offices around the world to local cloud and data center resources


Healthcare: IP-VPN Access to Azure / O365

Need high performance connectivity from their DC to Azure for real-time imaging in operating rooms

Need higher performance for over 36,000 seats to access Office 365 for hosted Exchange, Skype for Business, Sharepoint/One-Drive

Imaging studies create large data files requiring archiving for at least 5 years

Business Problem

Technical SolutionBenefits and Why Level 3 Won

1G IPVPN over 10G access from DC to Azure ExpressRoute via Cloud Connect.

IPVPN to Azure and O365 leverage access for Azure Private VNETs, Azure Public Services (AD, Media, Storage) and O365 (Exchange, Skype, Sharepoint).

Network-Based Virtual FWs Provide NAT and FW services, firewall template via XML/RSS feed from Microsoft.

Higher Performance. Provides higher bandwidth and lower latency than using the Internet.

Improved Security: Private connection to Azure VNETs, AD, Media Services and Storage. Firewall protection for Office 365.

Flexibility: Leverage access for access from DC and WAN to all Azure and O365 services.

Dynamic Capacity – Radiology Clinics

Customer DC/HQ

Azure Private VNETs

Azure Public

Services

Office 365

WAN


Level 3 Ethernet Services


Market & PerformanceThe Market and Our Position

Enterprise

Level 3 AwardsFrost and Sullivan - Competitive Strategy Innovation and Leadership AwardBusiness Metro Carrier Ethernet Services US 2015

MEF 2015 Ethernet Excellence Awards:• Retail Service Provider of the Year Global• Wholesale Service Provider of the Year North America• Wholesale Service Provider of the Year CALA• Retail Service Provider of the Year CALA• Retail Service Provider of the Year North America

# 1 U.S Competitive Provider# 2 U.S CE Services

The most MEF certified professionals of any

service provider globally!

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• Mission critical applications• VoIP and Video Conferencing• Applications requiring full

transparency (Multicast applications, etc)

• Point to point or point to multipoint service

• Bandwidth across the EVCs can be shared or dedicated

• Carrier-grade Ethernet network-to-network interface (NNI) to enable Service Providers extended reach for EPL and EVPL services over Level 3’s Ethernet network

E-AccessE-line EVPL E-Line EPL

Desc

riptio

nU

se C

ases • Extend reach for resellers services

such as internet and IP-VPN with EPL and EVPL over a single aggregation port

• Data Center Interconnect and Access between 2+ sites

• BCDR• Data Replication• VM Migration

• Point-to-Point service• Dedicated Capacity• Fully transparent

Ethernet Services Portfolio

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Level 3 Advanced Technical Services

An end-to-end managed Ethernet solution that can be designed, ordered and provisioned in a single workflow for a consistent customer experience

Customer Office

MPOE

Inside Wiring

Off-net Ethernet

On-net Ethernet

Report/ Alert• Latency• Packet Loss• Jitter

End-to-end Ethernet Solution

Inside Wiring Access Ethernet withOn-demand Bandwidth

Network PerformanceReporting/ Alerts+++

Level 3 Site Readiness Level 3 On- / Off-net Access Level 3 Ethernet Service Level 3 Enhanced

Management

Level 3 Dynamic Capacity

Level 3 Ethernet Networking Solution


E-Line – EVPL and EPL

Simplifies configuration as switched access is only supported for switched services

User Network Interface (UNI) is the physical interconnect at the customer Metro Edge• Port Size: 100M, 1G, 10G • Port Type: Electrical, Optical• Port Configuration:

• Multiplexed: UNI can be associated with one or more EVC’s (Max 50) and is always associated with the Ethernet service type EVPL

• Transparent: UNI can only be associated with a single EVC and is the only type that facilitates the E-line service type EPL. It can be used for EVPL as well

Ethernet Virtual Connection (EVC) is the logical interconnection of exactly two UNIs that are associated with one another and is part of the E-Line product set.• EVC type: EPL or EVPL. 2Mbps – 6GBPS *• EVPL class: Basic, Enhanced and Dedicated

Customer terminating equipment:• Network Interface Device (NID) will be deployed for all off-net services• On-Net delivery requires an aggregate device (3600CX or 4550) which contain ‘soft’ NIDs

Components


E-Line - EVPL

• Point to point or point to multipoint• Multipoint requires Multiplexed UNI to allow for segmentation by EVC• EVC Class- Whole EVC Gets the same CoS marking• Child products added to the UNI’s (Enhanced Management) or EVC’s (Dynamic Capacity)• Limits on Multicast and Broadcast traffic and most Layer-2 Tunneling Protocols

Putting the pieces together…..

Level 3 Global Ethernet Network

UNI- Multi/Trans

Basic, Enhanced or Dedicated Ethernet Virtual Circuit (EVC)Basic, Enhanced or Dedicated Ethernet Virtual Circuit (EVC)

UNI- Multi/Trans UNI- Multi

UNI- Multi/Trans

UNI- Multi/Trans

UNI- Multi/TransLevel 3 Global

Ethernet Network

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E-Line - EPL

• Point to point only• Transparent UNI’s- No need to mark traffic as it’s a One to One relationship• Dedicated treatment- No oversubscription and highest service class• Transparent service- Supports unlimited Multicast and Broadcast traffic and nearly all layer 2 Tunneling

protocols• Child products added to the UNI’s (Enhanced Management) only

Putting the pieces together……

Level 3 Global Ethernet Network

UNI- Trans

Single Dedicated Transparent Ethernet Virtual Circuit (EVC)

UNI-Trans

Delivered via

Pseudowire in April 2016!

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Ethernet Vs Legacy• E-Services are the go forward replacement for SONET ranging from E-

Line EVPL CoS Basic to, ‘the 4th CoS’, E-Line EPL

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CoS on E-Services

• Different from per frame or IP packet based CoS• All frames in the EVC or OVC get the same marking• Makes it simpler for the customer, send whatever DSCP or P-Bit marking

• In times of congestion the higher service class will get preferential treatment across the level 3 network with increased SLAs

EVC Class of Service

Basic • Best Effort markings with a 4:1 oversubscription• Sweet spot for most customers• Because of good network management, delivers

great service compared to our competitors

Enhanced • Medium markings with a 4:1 oversubscription• Good for customers running some CoS in their

network• Additional CoS protection without the cost of

Dedicated BW

Dedicated • Real Time marking with a 1:1 non-oversubscribed

bandwidth allocation• Customers traffic gets highest priority in the Level 3

network• Customers BW is removed from the available BW

on the Metro Ring as a result dedicated EVC/OVCs max out at 5Gig and Dynamic Capacity is not supported.

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In-Building Connectivity

Site Readiness• North America only– Child Product• Standardised 3rd Party cabling companies for connectivity• Separate Professional Services Component• Driven by last mile vendors limiting delivery to minimum

point of entry (MPOE)

Other X-Connects• EMEA X-Connect– Child Product with a small number of

locations supported• NA X-Connect- Larger data centers such as Equinix, specific

to the address in Scenario Manager• BLEC- Associated to eLynk, only available where eLynk

Interface is present and is a capable data centers.

Customer Connectivity

Customer Hand-off

Off-Net• ADVA NID supplied customer facing ports; 100Mb, GIGE

(Optical or Electrical)• Power will be required (standard spec will be supplied)

On-Net• ME CX3600 device delivers multiple customer ports; 100Mb,

GIGE, 10Gb (Optical or Electrical)• Connectivity can be onward connected to multiple areas of a

building (Electrical Cabling limits apply)• No need for NIDs On-Net (ME preforms a ‘soft-NID’ function)

• Improves customer experience (No Power, high density cable management)

• Reduction in single point of failure


Program Overview Reminder

• Pre-approved, targeted North America nearnet buildings and capital Focused on high opportunity locations in NA that we want to bring on-net ~7,700 locations pre-approved and growing – NO CAR REQUIRED Program locations enabled in Scenario Manager and IFO Qualified Sales: Any order using Ethernet or Waves access will trigger the build; no

Private Line Standard on-net pricing and discounting available; 1-year minimum term

• What’s New and Different in 2016? Removed minimum, building-specific revenue requirements ALL program buildings are now ‘Superbuildings’ Previous buildings that are not on new list will be grandfathered in In 2016: 15% compensation incentive for new building adds! Incorporation into MyLevel3 Portal and B2B API under development

Sales Action: Explore on-net build opportunities with your customers and find more details on Next Level: Selling > Sales and Deal Support > Support Teams > Regional Finance – NA* (includes an Excel version of the list and process guidance)

Any Term 1+ year

The Level 3 Investment Building Program

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http://nextlevel.level3.com/sales/Support/Pages/regional_finance.aspx


Level 3 Global Ethernet PlatformWith Adaptive Network Control

Award-winning platform, globally consistent product definition, differentiated customer experience

• Complete Ethernet product portfolio – E-Line, Pseudowire*, E-Access, Cloud Connect E-Line

• MEF CE 2.0 certified• 198 markets worldwide, 146 markets in North

America• 15-business day on-net installation intervals • 99.999% service reliability• End-to-end availability and latency guarantees• Adaptive Network Control with automated analytics,

alerts and Dynamic Capacity• Turnkey solutions with Level 3 Site Readiness and

Advanced Technical Solutions

MEF 2015 Ethernet Excellence Awards:• Retail Service Provider of the Year Global• Wholesale Service Provider of the Year North America• Retail Service Provider of the Year CALA• Retail Service Provider of the Year North America


Adaptive Network Control (SDN)


Adaptive Network Control - Powered by SDN

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Enhanced Management

• Site-specific and end-to-end visibility into performance and utilization

• Latency, jitter, packet delivery and bandwidth utilization

• Personalized watch / warning thresholds with alerting

• Available On and Off-Net

• Interactive control of available capacity: ad-hoc, scheduled or automated

• Predictable and assignable costs

• No downtime:

• Without complexities of paperwork

• Available On-Net only

Dynamic Capacity

Dynamic Connections

Dynamic Prioritization

• For one-time or periodic workloads

• Aligns network with cloud-based IT resource consumption with metered billing

• Operationalized with cloud partners to simplify and improve connectivity

• Scheduled or on-demand turn-up of new network resources

• Real-time control of class of service for application prioritization

• Actively manage your business applications performance

• No complicated or time-consuming contract changes as your business changes

• Ad hoc or scheduled in advance


MyPortal Dynamic Capacity Scheduling Tool

Ad Hoc Changes:Move the slider to the desired bandwidth and instantly see the costs per Meg per Hour

Schedule An Event In Advance:• One time• Daily of weekly• Set start and end times• Select specific circuits

Alerts Driven:• Automatically trigger a bandwidth

increase based on your utilization thresholds

Receive email notification with details for each event as it occurs

Massive carrier SDN deployment with over 40,000 active elements. Operational for more than two years, and selling services now.

Level 3’s SDN – Dynamic Capacity

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Use Cases


Wavelengths


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Industry Trends – Wavelength ServicesWell known technologies fueling our customers to transform their existing network architecture

Emergence of Cloud

Content Distribution

Storage/Backup

Data Security

Cloud Data Center Traffic is expected to grow 3.2x by 2018 (26% CAGR), 4X faster than traditional data center traffic.

Trends

Video traffic will grow 3x by 2018 with OTT/streaming fueling the growth at 28.1% CAGR. Skype for business driving WAN growth

Storage is Top 5 in terms of Tech Spend Growth, coming in at #4 (36% YoY Increase)

Evolving threats have companies taking extra precautions to protect data.

Increased complexity of corporate network fabric, requiring secure & scalable bandwidth both on the CSP and Enterprise side of the equation

What This Means

Transferring content between servers over IP becoming unwieldy and poses security concerns.

IPSEC tunnelling carries substantial overhead

Companies are looking to operate geographically diverse IT infrastructure due to BCDR, synchronous data replication, and data migration requirements

Aversion to sending vast amounts of critical and confidential data over the public internet.

Companies are moving to 3rd party Datacenters for their application hosting to reduce Capex and increase uptime

Moves where the applications live and all of the corporate uses on the WAN need reliable secure

connectivity to those applications

Data Center

Outsource


Solving for those challenges with Level 3® Wavelength Services

Customer requirements are necessitating complex diversity designs to ensure network resiliency. Customer-defined routing whereby the route design can be specified & guaranteed.

Near Limitless Scalability

Less expensive versus high capacity Private Line and layer 3 services. Cost effective solution for customers desiring to build and manage their own network, but not wanting to incur the capital investment required for a dark fiber solution

Customers can scale their network as their network evolves. First to take advantage of the advances in the bandwidth continuum (e.g. 100G-400G-1.2TB) and technological leaps that underpin/facilitate next-gen network architecture.

Service of choice for latency sensitive applications because the routing is predefined when the circuit is designed. Dedicated path as opposed to a Switched or Packet based Infrastructure (e.g. EVPL, IP VPN)

Can build highly resilient networks with end-to-end visibility and run multiple routing protocols. Provides customer greater control of their network. Customer’s are wanting to understand how their circuit(s) will be routed

Fixed Latency

Custom & Diverse Routing

Unparalleled Control and Transparency

Transformative Economics


Level 3® Wavelength PortfolioDesigning and building optical solutions is what we do, it’s in our DNA.

Global Security Operations CentersLevel 3 Threat Research Labs (TBA)

Security Professional Services

24/7 Global Network Operations CentersSolutions Architecture Team (SAT)

Project Management Team

Level 3 Global Wavelength Services

Intercity & Metro Waves

1G, 2.5G, 10G, 40G, 100G

OTU1-4 options

Unprotected/Protected

Custom/Diverse Routing

Latency Guarantees

Private Dedicated Networks

Bandwidth Blocks

Pre-provisioned capacity

Flexible Consumption Options

SANs Waves

1G, 2G, 4G, 8G, 10G SAN

Fibre Channel and FICON

Configurations 1-200km

16G (Coming Soon)

EON Waves

Leverages Level 3 ILAs in remote locations

Enabled at ~500 ILA locations across the

footprint

1G-100G

Subsea Waves

Owned capacity on Trans Atl and LatAm systems

1G, 2.5G, 10G, 100G

OTU1,OTU2, OTU4


55,000 Metro Network Miles24,000 On Net Metro BuildingsGigE-100GE Generally Available


Thank You!

Documents

2016 Ethernet Platforms & Strategy on LinkedIn