Table of Contents
This study presents an in-depth analysis of the key trends impacting the Business carrier Ethernet services market, and includes market revenue forecasts, ports forecasts and market share analysis. The analysis is segmented by:
• Transport length (metro versus long haul)
• Service type (dedicated versus switched)
• Service configuration (point-to-point and multipoint-to-multipoint)
• Port speeds (10 Mbps, 100 Mbps, 1 GigE and 10 Gbps)
Carrier Ethernet continues to gain acceptance among enterprises, due to the benefits it offers: scalability, reliability, and cost efficient bandwidth. U.S. market revenues crossed $ billion in 2013, and are expected to reach $ Billion in 2018.
Demand for point-to-point or E-Line Ethernet services continues to grow as businesses migrate from traditional private lines (T1/T3/SONET) to Ethernet. While both dedicated and switched Ethernet services are seeing growth, the latter is witnessing much higher year-over-year (YoY) growth rates (- percent) as compared to dedicated Ethernet (- percent). The growth in dedicated Ethernet is due to a huge installed base of SONET-based Ethernet Private Line (EPL) circuits in the metro market and DWDM-based EPL in the long haul market. As communication service providers (CSPs) expand their switched Ethernet footprint by utilizing their multiprotocol label switching (MPLS) networks and Layer 2 Ethernet switches, Ethernet Virtual Private Line (EVPL) is expected to gain traction in the market.
Similarly, E-LAN services continue to see growth in key verticals, such as healthcare, government and education, which often need multipoint-to-multipoint connectivity. Switched Ethernet, with its ability to support multiple Ethernet Virtual Circuits (EVCs) that enable service multiplexing onto a single port, has seen significant adoption in the metro markets. E-LAN services are a cost-effective and reliable alternative for customers migrating from expensive ATM and Frame Relay networks. However, demand for Virtual Private LAN Services (VPLS) continues to be modest, as most enterprises continue to prefer Layer 3 MPLS VPNs as opposed to VPLS for multi-site connectivity.
CSPs continue to focus on network expansion, service level agreements (SLAs) and classes of service (CoS) on their Ethernet networks. As part of their network expansion strategies, CSPs are bringing more customer locations on to their Ethernet networks in the metro space, and enabling intercity connectivity in the long haul space, either through partnerships or through capital investments.
As enterprises increase their adoption of Ethernet for mission critical applications, they are driving CSPs’ efforts on stringent monitoring of SLAs for switched Ethernet services. CSPs are beginning to offer standardized SLAs for switched Ethernet services; however, most SLAs are focused around availability and mean time to repair (MTTR). SLAs for latency and packet loss are offered based on customer needs. Frost & Sullivan expects this to change as a result of the Metro Ethernet Forum’s (MEF) introduction of Carrier Ethernet 2.0 (CE 2.0) specifications in February 2012. CE 2.0 establishes standards around Multi CoS (along with increasing manageability and interconnection of global Ethernet networks). The MEF standards for Multi- CoS are expected to enable CSPs to meet stringent performance objectives on Ethernet networks supporting critical applications such as voice, video, and connectivity to cloud applications.
As enterprise customers seek cost-effective solutions to converge their voice, data and video applications, Ethernet—with its large number of benefits, and cost effective, flexible, and reliable bandwidth—continues to be a winner in the transport services arena.
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