Current Analysis: Transition to next-generation WAN imminent

Oct. 17, 2007
OCTOBER 17, 2007 -- While significant numbers of enterprises still employ legacy wide area networking services such as ATM and frame relay, for many, the transition to next-generation IP/MPLS and carrier Ethernet services is imminent.

OCTOBER 17, 2007 -- Current Analysis (search for Current Analysis) today announced the findings of a survey of business migration plans for next-generation WAN services. The results indicate that while significant numbers of enterprises still employ legacy wide area networking services such as ATM and frame relay, for many, the transition to next-generation IP/MPLS and carrier Ethernet services is imminent.

The majority of ATM and frame relay users who responded to the survey plan to migrate part or all of their enterprise networks to IP VPN and/or carrier Ethernet services within the next two years, reveals the report. IP VPNs are the preferred alternative for 75% of those planning to migrate from frame relay services, although 61% of ATM users are planning to implement Ethernet as well. Among the decision factors behind the migration plans were the need for higher bandwidth at lower cost and the trend toward convergence of voice, video, and data services.

In addition, the survey reveals that Virtual Private LAN Services (VPLS) are not widely used at this time, and network managers are not well-educated about VPLS. Most respondents indicated no plans to deploy VPLS, and 40% did not know whether their carrier offered the service. However, of those users that had evaluated VPLS, 48% strongly preferred it to ATM and frame relay, suggesting that VPLS can provide carriers with an effective means of encouraging customers to migrate away from legacy services, say analysts.

"Incumbent service providers are challenged as more businesses demand IP and Ethernet services, yet many of their largest enterprise customers continue to operate aging ATM and frame relay networks," notes David Hold, senior analyst for Network Services. "However, our survey indicates that the majority of those legacy users are ready to make the move to next-gen services," he says. "This presents both an opportunity and a threat for the incumbents, since customers in transition are vulnerable to poaching by competitors touting the latest network technologies."

The Current Analysis study surveyed small, medium, and large customers of providers such as AT&T (and BellSouth), Level 3, Verizon, Time Warner, Qwest, Broadwing, OnFiber, Sprint/Nextel, American Fiber System, Cablevision/Optimum Lightpath, Charter Business, Cogent, Comcast, and more.


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