Ethernet pervasiveness in LANs drives Ethernet solutions for WANs — Demand for business sites networking increases especially in emerging countries — Ethernet solutions are less cost-intensive
Stuttgart, Germany — One of the most important drivers of Carrier Ethernet is the fact that the technology is well widespread, as over 95% of all companies’ LANs are based on it. As a con-sequence, it does make sense to link the various corporate sites via Ethernet rather than to use another technology in between. This way, ideally, all sites end up looking like a single LAN and can be managed accordingly. Not only. With Ethernet (layer 2) solutions companies have the advantage of retaining the control over IP routing and layer 3 protocols and can realise hybrid layer 2/layer 3 configurations. This results from a recent InfoCom study looking at market drivers and obstacles for carrier Ethernet while analysing in more details the current providers and offers and finally presenting a market sizing and forecasts.
The research clearly illustrates how the demand for business sites networking increases thanks to several factors, among which the most relevant are the increasing mobility and globalisa-tion as well as concerns regarding sustainable development, which leads to increased usage of web and video conferences. An interesting potential market is represented by SMBs (Small and Medium Businesses), especially in emerging countries, as they are often not yet equipped with VPNs: some of the demand for site networking solutions of these companies will move towards Ethernet and will thus drive carrier Ethernet services revenues. Closely re-lated to this aspect is the relentless rise of the demand for more bandwidth. This increase is due to a multitude of reasons, related to both the business and consumer world: increasing usage of smartphones and tablets, web and video conferences, online gaming, IPTV (IP Tele-vision), VoD (Video-on-Demand) and other bandwidth-hungry applications as well as cloud services in general (and basically the centralisation of some applications in a few key data centres).
As regards product and technology, Ethernet — in particular EoMPLS — does offer several advantages, such as better bandwidth granularity and scalability than SDH as well as the possibility to mix different topologies: P2P (Point-to-Point), P2MP (Point-to-Multipoint – also known as hub-and-spoke) and VPNs (Virtual Private Network – in the sense of any-to-any fully meshed VPNs).
Finally, Ethernet configuration is easier and cheaper than ATM, for instance, but also than traditional technologies such as SDH: Ethernet, for a given bandwidth, is indeed cheaper over long distances, and prices are expected to decline because of an increasing number of competitive offers available as well as decreasing equipment prices.
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