1. Global Ethernet Growth Soars Past Lagging Legacy Services

    CEN Feature (Oct 30 2012)

    1. Global Ethernet Growth Soars Past Lagging Legacy Services

      It’s official. Ethernet services have put legacy services in the rear view mirror across the entire globe, according to Vertical Systems Group’s latest research. There is no looking back. The bar graph that depicts Ethernet’s continued global growth during the next four years looks like an Olympic ski jump compared to the bar representing expected demand for legacy services. While there will be growth, that bar more closely resembles the diving board of a backyard pool. 

      “The pace of Ethernet’s growth worldwide is only going to ramp up even more,” said Rosemary Cochran, principal at Vertical Systems Group. “Many companies are increasing their 10 Mbps connections to 100 Mbps connections – 100 Mbps is the new 10 Mbps – and companies on the leading edge are moving towards 1 Gigabit connections.”

      While Vertical Systems’ analysis encompasses demand worldwide, actual growth varies throughout the world, she added. Asia-Pacific, which has a high density of fiber available in major business centers, is still the largest and most developed consumer of Ethernet services worldwide. The U.S. is the second largest regional market, the EMEA region (Europe, the Middle East and Africa) ranks third. Canada, Mexico, Brazil and other countries make up the rest of the global market, said Cochran.    

      Standardization has helped Ethernet to take off, but not all services are standard, and there are a wide variety of Ethernet services. One of the services that is growing very quickly is Ethernet access to IP/MPLS VPNs.

      “Many companies are using IP/MPLS VPNs. When they want to access those VPNs at higher speeds they prefer Ethernet,” said Cochran. “But not all Ethernet service providers offer IP/MPLS VPNs.”

      Vertical Systems Group projects the global market for business Ethernet services will reach $45.1 billion by 2016. Overall, Ethernet is poised to grow more than twice as fast as legacy services between now and 2016 because it offers businesses so many advantages. Its low cost per bit, flexibility and scalability give Ethernet a clear edge over legacy services such as T1 lines. The fact that businesses can add bandwidth incrementally and dynamically without upgrading their equipment also paves the way for substantial growth, she added.

      “There also are hundreds of service providers building out new Ethernet services and features, and they are putting much more emphasis on those services, too,” said Cochran.

      Interestingly, the news that Ethernet has surpassed legacy services globally was announced as the Metro Ethernet Forum (MEF) presented its Carrier Ethernet APAC Awards last week in Shanghai. Last summer, the Vertical Systems brightened the week of MEF members celebrating the group’s ten-year anniversary by releasing the news that Ethernet services had outpaced legacy services in the U.S.

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