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Users play it safe when choosing broadband services

Jun 16, 20032 mins
BroadbandInternet Service ProvidersNetworking

* Research figures suggest users are shying away from IP VPN and metro Ethernet

Conservative is probably the best way to describe how users are spending their IT budgets when it comes to broadband services. According to a recent report from consulting firm Vertical Systems Group, business users will spend $27.2 billion on high-speed data services this year.

But the majority of that total is going toward private line service spending. According to Vertical’s “Emerging Networks Service 2003” report, users are spending $11.9 billion on private line services this year, accounting for 44% of the total broadband spend.

This follows the cautious trend that business users set last year. In 2002, businesses invested $24.9 billion in broadband services, and $12 billion of that was spent on private line services. Much like this year, business users spent the most on private line in 2002.

Despite all the buzz surrounding services such as IP VPN and metro Ethernet, users are still shying away from these offerings.

“If the ‘Net crash didn’t happen we would have seen more IP VPN and Ethernet deployments, but those services like the rest of the industry are constrained,” Vertical analyst Erin Dunne says.

Although users are signing up for these services in droves, Vertical says that some businesses are biting the bullet.

We’ll delve deeper into where users are investing in the next newsletter.