Report: Ethernet service adoption 'soaring'; to hit $9.2B by 2016

High-bandwidth applications such as data center connectivity, disaster recovery/business continuity, and data storage replication are driving adoption of Ethernet in the U.S., says IDC.

Nov 5th, 2012

According to new research from International Data Corporation (IDC), adoption rates for Ethernet services are soaring, propelled by superior cost effectiveness, high-bandwidth scalability, ease of implementation, and overall flexibility. A new report from IDC forecasts total U.S. Ethernet revenue to increase from $5.2 billion in 2012 to $9.2 billion in 2016.

High-bandwidth applications such as data center connectivity, disaster recovery/business continuity, and data storage replication are the three primary applications driving adoption of Ethernet in the U.S., says the report. Growth of Ethernet access as an alternative to leased lines for access to other services, such as to the Internet or IP VPNs, is also seen contributing to demand. Additionally, Ethernet services are often significantly less expensive than private line or packet services, and lower equipment costs also contribute to overall cost-effectiveness, according to IDC.

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"Enterprises are increasingly utilizing 100-Mbit, Gigabit, and even 10-Gigabit Ethernet services for domestic and international WAN networking," comments Nav Chander, research manager of IDC's Enterprise Communication Services unit. "We are seeing a lot more medium-size U.S. enterprises adopt Ethernet with more fiber availability, more service competition, and faster time-to-service compared to alternatives."

Additional findings from the IDC report include the following:

-- E-Line services make up slightly less than half of the Ethernet services revenue at present.

-- The Ethernet access market will maintain growth rates above 20% during the forecast period, driven by growth in mobile backhaul, IP VPN, and dedicated Internet access services.

-- More medium-sized enterprises are also adopting Ethernet as they migrate to VoIP, employ storage networking, and access cloud-based services.

-- Implementation of high bandwidth Ethernet connectivity between data centers is a growing trend among enterprises.

The IDC study, U.S. Carrier Ethernet Services, 2012-2016 Forecast, analyzes the U.S. enterprise Ethernet services market. In addition to discussing key trends, it forecasts Ethernet ports/circuits and revenue through 2016. To purchase the study, contact IDC Sales at 508-988-7988 or sales@idc.com.

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