Ethernet services market expected to grow more than 25% over five years

MAY 4, 2009 -- The Carrier Ethernet market is showing double-digit growth despite recessionary spending by enterprises, says Insight Research.

MAY 4, 2009 -- US enterprises and consumers are expected to spend more than $27 billion over the next five years on Ethernet services provided by carriers, according to a new market research study from The Insight Research Corp. With metro- area and wide area Ethernet services now available from virtually all major data service providers, the market is expected to grow at a compounded rate of more than 25%, increasing from $2.4 billion in 2009 to reach nearly $7.8 billion by 2014.

According to Insight Research's market analysis study, "Carriers and Ethernet Services: Public Ethernet in Metro & Wide Area Networks 2009-2014," the economic recession that emerged in late 2008 is expected to dampen Ethernet service growth to a projected 14% this year; however, the study projects that growth will re-accelerate beginning in 2010 and that revenue growth will reach another peak of 32% by 2012.

Ethernet services are marketed under various names: transparent or native LAN, Ethernet, Gigabit Ethernet, GigE, metro Ethernet, Ethernet private line, Ethernet virtual private line, Layer 2 virtual private network, Ethernet access, and virtual private LAN service.

"The carriers are growing their Ethernet revenues in the context of steadily increasing data bandwidth demand and because Ethernet has real cost advantages in terms of providing flexible bandwidth and scalability that is superior to many competitive services," says Robert Rosenberg, president of Insight Research. "Though we are predicting an accelerating pace of Ethernet adoption, we are not suggesting that Ethernet is ready to 'take over the world.' Generally speaking, private line and frame relay customers are not ready to abandon these services, so the migration to Ethernet is going to be slow and steady," Rosenberg concludes.

The firm's report examines carrier Ethernet market spending and usage patterns by topology (E-line, E-LAN, and access), regional domain (metro, wide area, and access), retail/wholesale, and various bandwidth levels.

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