Ethernet services market 'on fire'

Worldwide demand for Ethernet services is "on fire", with sales expected to triple during the next four years, according to research published today.

Infonetics Research's latest report estimates that sales of Ethernet-based services, which topped $2.5bn in 2004, are expected to more than double in 2005.

It goes on to predict that revenues from the sector will jump another 276 per cent between 2005 and 2009 to reach $22.2bn.

"The Ethernet services market is on fire for several reasons," said Michael Howard, Infonetics Research principal analyst and author of the report.

"On the end-user side, many companies are hungry for more bandwidth and many are looking to reduce their wide area networking costs. Ethernet offers the only way to achieve both due to its superior bandwidth capacities and cheaper prices per bit.

"Service providers are also looking for ways to connect various sites with higher bandwidths at a cheaper price per bit, and Gigabit Ethernet point-to-point wholesale services meet this demand."

Howard added that the growth of Ethernet has also been spurred by recent carrier-class improvements to Ethernet products that enable providers to offer enhanced services that can replace legacy leased line, frame relay and ATM.

Infonetics noted that wholesale Ethernet services revenue, much of which comes from point-to-point Gigabit Ethernet links, currently accounts for about a quarter of all Ethernet services revenue.

Revenue from retail Ethernet services, including internet, Ethernet private line and transparent local area network services, accounted for the remaining three quarters of all Ethernet services revenue.

Asia Pacific accounts for over 40 per cent of total revenues for the sector, with EMEA at 30 per cent and North America at 20 per cent.