Datacenter, VPN, Cloud Service Connectivity to Drive Ethernet Revenues to $10.1 Billion by 2017
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Datacenter, VPN, Cloud Service Connectivity to Drive Ethernet Revenues to $10.1 Billion by 2017

Adoption rates for Ethernet services are soaring, propelled by superior cost effectiveness, high-bandwidth scalability, greater availability, and overall flexibility for connecting to cloud and datacenter virtualization applications. According to new a forecast from International Data Corporation (www.idc.com), total U.S. Ethernet revenue will increase from US$6.2 billion in 2013 to $10.1 billion in 2016.

Enterprises across all major verticals are utilizing Ethernet services for domestic and international wide area network (WAN) and metro area connectivity, as well as for access to other services, such as connecting to the Internet, IP VPNs, and cloud service providers, says the research group. The primary drivers of Ethernet adoption among U.S. enterprises are high-bandwidth applications, such as datacenter inter-connectivity, disaster recovery/business continuity, and data storage replication. Enterprises rank security as one of the most important features of Ethernet, followed by access to IP VPN, and service monitoring and reporting.

"Today Enterprises are increasingly utilizing 100Mb, Gigabit, 10 Gigabit, and even some 40 Gigabit Ethernet services for their domestic and international WAN networking," says Nav Chander, Research Manager, United States Enterprise Communication Services. "We are also seeing a lot of U.S. enterprises upgrading their Ethernet bandwidth and adding more applications and business locations on net because of the economics and faster time-to-service compared to the alternatives. Together, these trends will enable enterprises to converge their communication platform requirements with Ethernet."

Additional findings from IDC's research include the following:

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

° The Ethernet access market will maintain growth rates above 21% during the forecast period driven by growth in mobile backhaul, IP VPN, dedicated internet access services, and Ethernet VPN to cloud service providers.

° Implementation of high bandwidth Ethernet connectivity between datacenters is one of the fastest  growing requirements among enterprises.

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

 

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