Worldwide metro Ethernet equipment revenue is expected to more than double between 2004 and 2008, from $3.1 billion
to $7.6 billion, totaling almost $26 billion during the five-year period, and
port shipments will more than quadruple, according to Infonetics Research's
Metro Ethernet Equipment report.
All this equipment buying is driving the Ethernet services market, which
will jump 276 percent between 2005 and 2009, reaching $22.2 billion, according to Infonetics.
SBC, BellSouth, Verizon,
TWTelecom, BT, France Telecom, KT, NTT, AT&T, and others are lowering the
price per bit for Ethernet bandwidth, helping fuel demand for it in all
regions of the world.
"We added carrier Ethernet switches and routers market share to our report
this go-round, and not surprisingly, Cisco led in 2004 with almost half the
worldwide revenue, followed by Riverstone and Alcatel," said Michael Howard,
Infonetics Research principal analyst. "We also created a new category,
Ethernet Access Devices (EADs), to track products that solve problems
associated with delivering Ethernet over various types of copper and fiber
connections. EADs are an important and fast-growing segment of the metro
Ethernet market, growing 2,353 percent between 2004 and 2008, from $20 million
$492 million."
Other Infonetics findings include the following:
- Worldwide carrier Ethernet switch and router revenue hit $183 million
in 2004, and will grow to $2.6 billion in 2008, representing 34 percent of the
metro Ethernet equipment market
- With the exception of Cisco, a shakeup in market share is expected in
2005
- Nortel is the worldwide revenue market share leader for both Ethernet
over SONET/SDH and Ethernet over WDM in 2004
ABI Research reports that more communications operators are considering Ethernet for metropolitan area networks because cost-effective, ubiquitous and allow for convergence.
A staple computer networking technology, Ethernet is quickly gaining popularity in the world of urban telecommunications, the research firm reports.
However, "carrier grade" Ethernet isn't the same as the technology in LANs. According to Michael Arden, ABI Research's principal analyst of broadband technologies, "carrier grade" means enhancements allowing it to equal SONET and SDH networks in terms of protection and disaster recovery. It can manage the packets just as effectively, and can interact with TDM and other formats.
Arden said Ethernet's lower cost is the key, as long as the perception of traditional Ethernet's technical limitations can be corrected.
ABI Research's new study, "Carrier Ethernet Equipment and Ethernet Services", examines the growth of the market for carrier-grade Ethernet equipment at the core, edge, and access levels of the network and explores the Ethernet services that are driving the demand.
"We divided the market into core, edge and access categories," said Arden. "Access technologies are very different from core and edge," he said, "and even they differ from each other in scalability. Previous research doesn't even address the access part of the carrier Ethernet network."
The report, Arden said, also looks at the operators adopting Ethernet. Surprisingly, he said, they're not always the big incumbents. Early adopters are often cable companies and Tier 2 CLECs looking to differentiate themselves from their larger competitors.
Companies that can offer end-to-end Ethernet solutions as well as those with existing supplier relationships with operators have a significant advantage, ABI reports. The reports warns that startup vendors unable to address all market segments should consider alliances with better-established players.
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