Carrier Ethernet market to net $1.4B this year

Sept. 1, 2007

The Carrier Ethernet market is expected to grow from $1.4 billion in 2007 to nearly $6 billion by 2012, contends a new market research study from The Insight Research Corp. With metro-area Ethernet services now available from virtually all major data service providers and wide-area Ethernet about to get a shot in the arm from the dominant carriers, the market is poised to take off, say analysts.

According to Insight Research, the term Carrier or public Ethernet refers to any Layer 2 public network carrier service that extends Ethernet beyond the LAN and connects to customers through Ethernet interfaces.

Until recently, metro Ethernet was the largest portion of the market as Carrier Ethernet sales primarily have been between points within a metropolitan area. This is expected to change, however, as major incumbents-particularly AT&T and Verizon-introduce long-haul Layer 2 VPNs, say analysts.

“Insight’s research suggests that the many-to-many E-LAN service will be the fastest growing part of Carrier Ethernet because the economic advantages of Ethernet actually increase exponentially (as opposed to proportionally) in relation to the number of points connected,” notes Robert Rosenberg, president of Insight Research. “And though we expect to see an accelerating pace of Ethernet adoption across the board, we are not ready to predict that Ethernet is ready to ‘take over the world,’” he admits. “Generally speaking, private line and Frame Relay customers are not ready to or interested in deserting longstanding services, so the migration to Ethernet is going to be slow and steady.”

Visit www.insight-corp.com for more information about Insight’s report, “Carrier Ethernet Services 2007-2012.”

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