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H323 Terminal H323 Gatekeeper H323 Gateway PSTN switch a IAM b ARQ c ACF d Setup (with faststart) e Call proceeding f CPG g ARQ h ACF i Alerting j k One-way audio l Connect (with faststart) m ANM n Two-way audio ACM

Thus, Ethernet offers a compelling value proposition to both end users and Service Providers; this win-win proposition has led to significant growth in Ethernet services and positions Ethernet even more strongly in the MAN and the WAN

top 10th percentile will perform and should receive outstanding pay In Figure 2-9B, the performance range is 80 percent for low performers and 120 percent for excellent performers Sales management needs to identify the performance range for each measure in each sales compensation plan As we learn later, we will use this information to build the sales compensation formula rates Sample Performance Range Policy: Threshold and excellence performance levels will be set for each performance measure Threshold reflects the lower 10 percent of performance, and excellence represents the top 10 percent of performance Your Performance Range Policy:

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Revenues from Ethernet-based services worldwide are fairly significant and in the range of over $2 billion (based on 2005 figures from Infonetics) The market is expected to experience a Compounded Annual Growth Rate (CAGR53) of 40 percent between 2005 and 2009, reaching approximately $20+ billion Some analysts have even more promising numbers; Vertical Systems Group, for instance, assesses that fiber-based business Ethernet services in the US alone will be over $15 billion cumulative over the next five years (2007 2012) A more comprehensive discussion of the drivers of market growth is provided in 3, but it is clear that Ethernet in the MAN, and WAN is beginning to develop a critical mass and is growing at a very impressive pace Ethernet is slowly beginning to dominate niche markets such as the metro access portion of Service Provider networks Its ability to enable broadband access is without question beginning to extend to the MAN and WAN as well However, Ethernet beyond the LAN especially deeper in the MAN and WAN is still is a long way from dominating the market, notwithstanding the overwhelming advantages discussed earlier Apart from its relatively late entry, at least in a substantial way, Ethernet s transition to becoming a serious contender as a Service Provider offering in the MAN, and WAN, requires it to support numerous other capabilities that are essential to competing with existing solutions such as ATM and Frame Relay Figure 118 illustrates the spending of US enterprises for broadband services today; Ethernet accounts for only a paltry 3 percent of spending In order to achieve to LANlike dominance in the MAN and WAN, Ethernet must grow at a near exponential rate

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Performance periods and payment periods work together Sales management sets the performance period for each formula measure the length of time between performance measurement periods This window of time can be a week, month, quarter, or even as long as a year Shorter sales cycles generally have shorter performance periods; longer sales cycles generally have longer performance periods Payment periods define when incentive payments occur Normally, the performance period and the payment period are the same, for example, measured and paid quarterly Additionally, performance and/or payment periods can be discrete or cumulative

US Business Data Services Private Lines 39% Other (2%) Ethernet (3%) Dedicated IP VPNs 8% 9% ATM Business DIA Total = $31B 10% 29% Frame Relay

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Figure 118 Ethernet portion of broadband business in the US (Vertical Systems Group, 2006)

over the next several years And it must address the challenges and shortcomings that it faces in that quest

Discrete: Discrete performance/payment periods stand alone for measurement and payment purpose For example, a sales compensation plan that pays monthly discrete treats each month as a standalone measurement and payment period No previous or future month s performance will affect the payout for an individual month Use less than annual discrete measurement periods when sales cycles are short and sales personnel have no flexibility or selfserving motivation to move orders from one period to another

Notwithstanding the promise of Ethernet beyond the LAN, there are still quite a few challenges that need to be addressed before it can credibly become a dominant service Seeing as it was originally conceived in the context of a LAN, some fundamental constraints have surfaced as Ethernet is transformed to a Service Provider delivered service in a MAN or WAN These are noted next

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