Infonetics Finds Exchanges Drive Ethernet Services

Market research group Infonetics Research has released a biannual report that finds Ethernet services are on the rise, driven by the burgeoning growth of Ethernet Exchanges and their use in mobile backhaul.

Carrier Ethernet Exchanges are an important new development that facilitate Ethernet connections and accelerate the move to Ethernet transport and services, said Michael Howard, co-founder and principal analyst for carrier and data center networks at Infonetics Research. The exchanges work like this; service providers pay small fees to a Carrier Ethernet Exchange to make it easy for them to locate, buy, and provision Ethernet connections from each other. This in turn jumpstarts more Ethernet services and more of the IP VPN services that ride on Ethernet transport. The net effect of these new Ethernet exchanges, combined with fast-rising mobile backhaul connections, is a quickening of the Ethernet and IP VPN services markets, and as a result, we have raised our revenue forecasts.

Those Infonetics predictions are based on key findings such as global carrier revenue from Ethernet services jumped up to $20.8 billion in 2009, up 23 percent from the previous year; by contrast, IP MPLS VPN service revenue rose a more modest 12 percent over the same period. Together, these technologies are expected to reach $68.2 billion by 2014. These numbers are driven by businesses who see IP MPLS VPNs as a more cost-effective, high-capacity WAN solution, while Ethernet lowers the cost-per-bit ratio even further. In turn, these technologies are spurring customer interest in managed layer 2 and layer 3 services, where the expertise, knowledge, and tools of service providers can help stabilize WAN costs and prioritize critical applications while increasing capacities.

The report, the 2010 Ethernet and IP MPLS VPN Services, covers Ethernet services by wholesale and retail, speed, and Layer2/3 IP MPLS VPN services, managed and unmanaged, broken down by country or region.


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