1. IDC: Carrier Ethernet Access, High-Speed Services Growing Fast

    CEN Feature (Nov 20 2012)

    1. IDC: Carrier Ethernet Access, High-Speed Services Growing Fast

      Point-to-point E-Line Carrier Ethernet services comprise nearly half of all U.S. Carrier Ethernet retail revenues (48.9%) today, says IDC Research. But the two other main types of Carrier Ethernet services – E-LAN and access – are growing faster, according to IDC researchers.

      By 2016, Carrier Ethernet access revenues will nearly match those from E-Line services, IDC said. By that date, E-Line will represent 36.9% of the Carrier Ethernet retail market and access revenues will represent 35.8%, according to the research firm.

      In an interview, Nav Chander, IDC research manager for enterprise communication services, attributed the strong growth in Carrier Ethernet access revenues to several factors – including increased use of Carrier Ethernet to provide the access link to Layer 3 VPNs, dedicated Internet access and other Carrier Ethernet services.

      Chander notes, though, that all Carrier Ethernet services will see strong growth, with access lines more than tripling and E-LAN services more than doubling between 2011 and 2016.

      When it comes to speeds, Carrier Ethernet services operating between 100 Mbps and 1 Gbps today generate the most revenues in the U.S., followed by 10 Mbps -100 Mbps connections – and services at those speeds will remain the number one and two revenue generators through 2016, IDC says. But although connections above 1 Gbps represent a relatively small percentage of Carrier Ethernet revenues today, they have seen a strong uptick, Chander said.

      “The thing I’m finding surprising is the rapid migration to very high bandwidth,” he said. “Gig E and 10 Gig E are becoming more and more popular.”

      IDC attributes the strong growth in Carrier Ethernet services operating at 100 Mbps or more to three key applications including data center connectivity, disaster recovery/ business continuity and data storage replication.

      Increased interest in using “big data” is driving the need to move large amounts of data from one data center to another – and with its ability to deliver high-bandwidth services, Carrier Ethernet is well suited to meeting that requirement, Chander said.

      On the other hand, data storage replication and disaster recovery are very latency sensitive -- and “as a Layer 2 service, Carrier Ethernet is well suited” to meeting that requirement, said Chander. The increased number of network operators offering Carrier Ethernet services also has made it more practical and attractive for enterprises to use Carrier Ethernet, he noted.

      Certain industries -- including health care, finance and insurance -- are particularly likely to select high-speed Carrier Ethernet services, Chander said. As healthcare providers increasingly are using networks to move digitized medical records from one location to another, he noted that some hospitals are opting for 10 Gbps connectivity.

       “When you digitize CAT scans or MRIs and have to transmit them, you’re talking about huge amounts of bandwidth,” commented Chander.

      Chander noted, however, that most Carrier Ethernet connections today are within a metro area. When an enterprise customer needs connectivity between metro markets, it is more likely today to choose an optical solution, Chander said.

      “It will be an area where Ethernet will become an important part, but not yet,” he said.

      Chander also sees Carrier Ethernet growing in popularity with medium-size businesses – a trend he attributes, in part, to Comcast’s participation in the market. He noted that Comcast has been advertising advanced Ethernet services for business on the radio in at least one metro market.

      “They’re making more people aware that Ethernet is an option,” said Chander. “Comcast entering the market has raised the awareness.”

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