Enterprise IP & Ethernet spending to eclipse legacy services

April 25, 2007
APRIL 25, 2007 -- Legacy services, including Frame Relay, private line, and ATM, currently account for the majority of enterprise wireline data services spending, but this is expected to change over the next three years.

APRIL 25, 2007 -- Enterprise spending on IP and Ethernet will eclipse legacy services in 2010, which reflects the acceleration of firms toward next-generation networks, reveals a new report from In-Stat (search for In-Stat).

Enterprises lead overall spending for US business wireline data services; the segment is expected to account for over 60% of the US business market for wireline data services in 2007. The enterprise segment will continue to account for a similar percentage of overall wireline business spending and experience modest, consistent growth through 2011, say analysts.

According to the report, "Share of Wallet: Enterprise data and IP spending," enterprises will spend $24.3 billion on wireline data services in the US this year. Legacy services, including Frame Relay, private line, and ATM, currently account for the majority of revenue, but this will change over the next three years.

"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."

In-Stat's report forecasts total US enterprise wireline data services spending and provides breakdowns by service type, including Internet, private line, ATM, Frame Relay, IP VPN, and Ethernet through 2011. The report also includes analysis of drivers influencing the development of these services among US enterprises.


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