Demand for Ethernet equipment and services is expected to grow dramatically in the coming years because of the technology's familiarity, ease of use and technical advancements.

Ethernet has been the dominant LAN transport protocol in corporate networks for almost 30 years. But now carriers are using it to inexpensively build high-performance networks using switches, optical transport gear and installed fiber, to offer services that extend Ethernet from the LAN to the metropolitan-area (MAN) and WAN.

The growth in data services translates into growth for Ethernet equipment and services in the carrier network. SONET networks are optimized for voice and do not inherently provide efficient bandwidth utilization for data.

Moreover, the ubiquity of Ethernet in corporations makes it an especially attractive service as carriers attempt to provide "seamless" connectivity from the company through the MAN and WAN. And Ethernet offers operational simplicity because of decades of user experience.

Finally, Ethernet presents a relatively inexpensive alternative to high-speed services provisioned from legacy interfaces. This cost-effectiveness is driving carrier interest in Ethernet now and should continue to do so in the future, research firm Current Analysis says.

In the MAN market, worldwide Ethernet equipment revenue hit $2.5 billion last year, and is projected to grow to $5.7 billion by 2006, according to Infonetics Research. Worldwide metropolitan Ethernet equipment ports reached 756,000 in 2002 and will more than quadruple to 3.3 million by 2006, according to the firm.

Compared with SONET, Ethernet will account for a larger portion of carriers' capital expenditures for the MAN, Infonetics predicts. Infonetics co-founder and principal analyst Michael Howard predicts that Ethernet will "take over the metro" in the next 10 years.

Even with the pressure of decreasing capital expenditures - carriers have cut spending by half or more over the past two years - service providers are investing in metropolitan Ethernet equipment to respond to customer demand or risk losing customers to a competitor, Infonetics says.

But are Ethernet services really new? Incumbent carriers have offered transparent LAN services (TLS) over Ethernet for years, but these have largely been niche products, according to Current Analysis.