The North American carrier Ethernet services market is entering the growth phase of its product life cycle, owing immensely to the standardization of services by the metro Ethernet forum (MEF). The MEF 14 certification not only endorses adherence to functional specifications but also the actual service delivery and performance of Ethernet services. This revolutionary step is driving the adoption of the service across business verticals.
New analysis from Frost & Sullivan (communicationsservices.frost.com), NA Carrier Ethernet Services Market, finds that the market earned revenues of $1.354 billion in 2006 and estimates this to reach $5.399 billion in 2011.
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"Since most businesses adopt a converged network to run multiple bandwidth-intensive applications on the same backbone, consistent high-quality performance of the network, or simply put, reliability of the network is of utmost importance," observes Frost & Sullivan Senior Industry Analyst H. Roopashree. "With the MEF 14 certification addressing the same, adoption of Ethernet services to run mission-critical applications expects to witness an upswing in the coming years."
As the MEF plays a key role in standardizing the services and certifying the quality of service, the technology is gaining widespread acceptance. The simplicity of implementing Ethernet services and the clarity in pricing has increased the demand for Ethernet services by bandwidth-hungry customers across business verticals.
Market trends indicate that the technology has evolved from being limited to intra-city/metro area networks to intercity services. Service providers with a national presence can make the most of this opportunity. In fact, a few service providers are already targeting Ethernet services for global wide area network (WAN) connectivity. They are gearing up to cater to this growing demand by signing network-to-network interface (NNI) agreements to expand their market presence.
Service providers are now supporting applications such as LAN connectivity, private branch exchange (PBX) interconnection, VoIP, conferencing, disaster recovery, distributed computing and converged applications, e-commerce, help desk support, remote mirroring and fail-over, wireless backhaul and access as well as enterprise applications (ERP, CRM, supply chain, and so on), among others.
With the introduction of virtual private LAN service (VPLS) by major service providers such as AT&T, Time Warner Telecom and Yipes, customers now have a fully meshed multipoint connectivity. This provides a strong impetus to E-LAN services market. The demand for such connectivity can continue driving market expenditure in the future. Moreover, price stabilization expects to fuel the rapid adoption of Ethernet services.
However, market perception of Ethernet’s limitations, which, while less than in previous years, continues to be a restraint, requiring service providers to spend time educating prospective customers on the advances offered by carrier Ethernet. Prospective customers are not fully aware of the work on standards that has taken place, as well as the growing use of multipoint services beyond Ethernet access.
"Service providers must, therefore, spend a good portion of their time educating consumers and publicizing the strengths of Ethernet and its suitability as an intra-metro and inter-metro connectivity service to strengthen their foothold in this market," says Roopashree.
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