Ethernet Services Hit $9.4B

CAMPBELL, Calif. -- With corporate data traffic growing unabated, organizations around the world are rapidly exceeding the capacity limits of their legacy frame relay, ATM, and private line networks, and as they do, they are increasingly replacing these legacy services with Ethernet and IP MPLS VPN services, which are more flexible and less restricted than their legacy counterparts.

This shift is happening swiftly. After more than doubling in 2005 to$5.7 billion, worldwide Ethernet service revenue jumped another 65% in 2006 to reach $9.4 billion, and IP MPLS VPN service revenue grew 38% in 2006 to $10.9 billion, according to Infonetics Research's latest market size and forecast report, "Ethernet and IP MPLS VPN Services."

"Ethernet and IP/MPLS are the layer 2 and layer 3 service protocols of choice for today's data service networks. Small and medium businesses and remote and branch offices of large businesses especially like Ethernet and IP MPLS VPNs because they offer considerably more bandwidth with little or no increased WAN costs. These are the very customers service providers are targeting for new revenue, and they're succeeding: based on the revenue increases we're seeing, it's obvious there's been and will continue to be a strong uptake in new subscribers to Ethernet and IP MPLS VPN services," said Michael Howard, principal analyst at Infonetics Research.

Infonetics Research Inc.