Metro Ethernet services are just beginning to gain traction in the marketplace. IDC forecasts metropolitan Ethernet service revenues in the United States will increase at a 36.7 percent compounded annual growth rate to $740.8 million in 2006, from $155.2 million in 2001.
"The factors that are driving the demand for metro Ethernet are similar to those of other metro data services: increasing corporate use of the Internet, multimedia and other high-bandwidth applications, and the need to connect data centers, carrier hotels, and central offices within a metropolitan area," said Ron Kaplan, senior research analyst of IDC's Business Network Services program.
Metropolitan Ethernet services use the simple and well-known Ethernet technology to link local area networks (LANs), deliver IP access, or connect data centers within a metropolitan area at prices that are very competitive compared to existing technologies. "Many of the new services have been made possible by the deployment of optical fiber in downtown areas and by the development of 1Gbps Ethernet equipment," Kaplan said. "Only a few years ago, metro Ethernet services were limited to 100Mbps."
Ethernet's primary advantage over other technologies is price. "It can cost two to four times less for a customer to use 100Mbps or 1Gbps Ethernet in a metropolitan area network than to use a comparable amount of bandwidth over private lines. Moreover, Ethernet is well understood as it is used in most U.S. LANs and generally does not require customers to purchase special equipment," said Courtney Munroe, program vice president of IDC's Telecommunications research.
IDC's new report, "U.S. Metropolitan Ethernet Services Market Forecast and Analysis, 2001-2006" analyzes the market for U.S. metropolitan Ethernet services by revenues and ports and further segments the market by port speed and application type. The study also contains profiles of the major Ethernet service providers, both established and emerging, including transparent LAN and IP access over Ethernet service providers.
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