Enterprise IP and Ethernet spending to eclipse legacy services

Enterprise spending on IP and Ethernet will eclipse legacy services in 2010, reflecting an acceleration toward next-generation networks among customers in that segment, says a new report from In-Stat.

Enterprises lead overall spending for U.S. business wireline data services. The segment is expected to account for more than 60% of the U.S. business market for wireline data services in 2007. In-Stat analysts expect the enterprise segment to continue to account for a similar percentage of overall wireline business spending and experience modest, consistent growth through 2011.

According to the report, “Share of Wallet: Enterprise Data and IP Spending,” enterprises will spend $24.3 billion on wireline data services in the United States this year. Legacy services, including Frame Relay, private line, and ATM, currently compose the majority of revenue, but this will change over the next three years, say analysts.

“Carriers continue to expand the capabilities of IP VPN and Ethernet services, making them an increasingly attractive alternative to legacy services such as Frame Relay and private line,” explains Steve Hansen, In-Stat analyst. “Looking forward to 2010, these services will be the leading revenue generators in the enterprise segment.”

The report covers the market for wireline data services among large U.S. enterprises. It contains forecasts for total U.S. enterprise wireline data services spending, as well as breakdowns by service type.