Ethernet Booming Despite Economic Slump

In defiance of the economic downturn, revenue for Ethernet services grew 36% in 2008 to $16.8 billion and is on track to nearly double to $33 billion by 2013, according to a new report from Infonetics Research.

Noting that the fastest growing Ethernet service revenues are in the 10G speed segments of the market, Infonetics said that Ethernet services are typically at least 20% lower than frame relay or private line services.

"In today's uber-competitive, fast-changing, network-oriented world," said Infonetics principal analyst Michael Howard, "organizations are looking to control WAN costs despite rising bandwidth needs by turning to Ethernet, a known cost-per-bit champion, and to managed Layer 2 and Layer 3 services."

Howard noted that many carriers have been embracing Ethernet as IP next-generation networks are being moved from TDM to packet based networks. He added that carrier Ethernet investment will increase each year over the next five years. "These IP next generation projects depend heavily on IP, MPLS, and Ethernet, and gradually will employ the use of Ethernet transport instead of SONET/SDH."

For example, Howard noted that the monthly cost for 100M Ethernet in North America is about $50 per megabyte while the monthly cost for DS3s or SONET is about $180 per megabyte. The analyst added that North American Ethernet and IP MPLS VPN services are likely to gain global market share in future years from Asia Pacific markets, which have paced the Ethernet services market in recent years.

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