Robust Ethernet Service Adoption Forecast to Drive U.S. Revenues to $9.2 Billion by 2016, IDC Says

FRAMINGHAM, Mass., November 1, 2012 – Adoption rates for Ethernet services are soaring, propelled by superior cost effectiveness, high-bandwidth scalability, ease of implementation, and overall flexibility. According to new research from International Data Corporation (IDC), total U.S. Ethernet revenue will increase from $5.2 billion in 2012 to $9.2 billion in 2016.

High bandwidth applications such as datacenter connectivity, disaster recovery/business continuity, and data storage replication are the three primary applications driving adoption of Ethernet in the U.S. "Enterprises are increasingly utilizing 100Mb, gigabit, and even 10 gigabit ethernet services for domestic and international WAN networking," said Nav Chander, research manager, Enterprise Communication Services. "We are seeing a lot more medium-size U.S. enterprises adopt Ethernet with more fiber availability, more service competition, and faster time-to-service compared to alternatives." Growth of Ethernet access as an alternative to leased lines for access to other services, such as to the Internet or IP VPNs, is also contributing to demand. Additionally, Ethernet services are often significantly less expensive than private line or packet services, and lower equipment costs also contribute to overall cost effectiveness.

Additional findings from the IDC forecast include the following:

E-Line services make up slightly less than half of the Ethernet services revenue at present.

Ethernet access market will maintain growth rates above 20% during the forecast period driven by growth in mobile backhaul ,IP VPN, and dedicated Internet access services.

More medium-sized enterprises are also adopting Ethernet as they migrate to VoIP, employ storage networking, and access cloud-based services.

Implementation of high bandwidth Ethernet connectivity between data centers is a growing trend among enterprises.

The IDC study, U.S. Carrier Ethernet Services2012-2016 Forecast (IDC #237543), analyzes the U.S. enterprise Ethernet services market. In addition to discussing key trends, it forecasts Ethernet ports/circuits and revenue through 2016. Data is segmented by E-Line, E-LAN, and Ethernet access services — and then further sub-segmented by metro area network (MAN) and wide area network (WAN) services, and also by speed. E-Line revenue is split into Ethernet private line (EPL) and Ethernet virtual private line (EVPL), and the E-LAN revenue forecast includes segmentation for Ethernet virtual private LAN services (VPLS).

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