Business market stoked for Ethernet services

Better bandwidth, lower costs.

There might be no hotter data service now than Ethernet. The worldwide market for Ethernet services was $2.5 billion in 2004 and is expected to more than double this year, according to Infonetics Research. From there, Ethernet service revenue is expected to jump another 276% by 2009 to $22.2 billion.

Many billows are stoking this fire.

On the customer side, companies are hungry for more bandwidth and looking to reduce WAN costs. Ethernet offers a way to do both because of its bandwidth capacities and relatively inexpensive prices per bit.

On the service provider side, carriers also are looking for ways to connect their various sites with higher bandwidths at an inexpensive price per bit, and Gigabit Ethernet point-to-point wholesale services meet this demand.

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There might be no hotter data service now than Ethernet. The worldwide market for Ethernet services was $2.5 billion in 2004 and is expected to more than double this year, according to Infonetics Research. From there, Ethernet service revenue is expected to jump another 276% by 2009 to $22.2 billion.

Many billows are stoking this fire.

On the customer side, companies are hungry for more bandwidth and looking to reduce WAN costs. Ethernet offers a way to do both because of its bandwidth capacities and relatively inexpensive prices per bit.

On the service provider side, carriers also are looking for ways to connect their various sites with higher bandwidths at an inexpensive price per bit, and Gigabit Ethernet point-to-point wholesale services meet this demand.

On the equipment side, carrier-class improvements have been made to Ethernet products that are enabling service providers to offer new Ethernet services, including those with QoS and service-level agreements. These are usually the chief selling points of the traditional private line, frame relay and ATM services that they are now beginning to replace, Infonetics says.

According to Vertical Systems Group, the top five sources of Ethernet service ports based on enterprise customer installations are:

• T-1 Internet access, the leading source of Ethernet ports because of ease of service migration coupled with demand for higher speed connections to the Internet.
• Bandwidth-hungry new or "greenfield" applications.
• Migration from ATM ports at rates of T-3 and above.
• Migration from site-to-site dedicated IP VPNs.
• Conversions of T-1 frame relay ports.

Combined, these five sources represent 77% of the U.S. Ethernet port base in 2004, according to Vertical. This type of demand is prompting all major carriers to morph their traditional Transparent LAN Services (TLS) into more flexible, variable and reliable Ethernet services. It's even igniting a resurgence in previously bankrupt service providers such as Yipes Enterprise Services. Yipes received $24 million in new funding two months ago, bringing the total to $94 million in what it has raised since emerging from bankruptcy three years ago.

There are several flavors of Ethernet service. Ethernet is essentially an application on top of an existing transmission technology, such as SONET or leased lines. It is also available on pre-standard technologies such as Resilient Packet Ring, or in a network layer technology like IP/MPLS. Ethernet also can be offered as a standalone service on copper or fiber, or delivered on a wavelength over Dense Wavelength Division Multiplexing (DWDM) services.

Ethernet also is offered as a switched service shared by many companies over a public network, or a dedicated service for corporations desiring an exclusive facility.

Loyola University in Maryland uses a switched Ethernet service from Verizon to tie in remote campuses and give them all of the technical resources available at the main campus in Baltimore. The school has three remote campuses, between two and 20 miles away from the main campus, in Timonium, Columbia and Belvedere Square.