Analysts predict steady growth for wide-area Ethernet voice and data

Metropolitan Ethernet may be less expensive and easier to implement than older inter-office networking standards, but opinion is mixed among analysts as to how quickly the service will become the most-favoured wide-area networking technology.Large companies will continue to have a choice of well-established services, such as Frame Relay and Asynchronous Transfer Mode (ATM), which have large customer bases, says Joshua Holbrook, senior analyst at The Yankee Group in Boston.
“IT managers understand and are comfortable with the legacy technologies and, as a result, many will be slow to transition,” he says.
“That said, Yankee anticipates that U.S. Frame Relay and ATM revenue will gradually decline over the next five years.”
The Yankee Group is forecasting a 40 per cent compound annual growth rate in the metro Ethernet market over the next five years.
However, 45 per cent of companies surveyed by Cambridge, Mass.-based Forrester Research Inc. have no interest in the service.
Metro Ethernet is typically available only over fibre, and most American businesses have either T1 or T3 connections, said Forrester Research vice-president Lisa Pierce.
Adoption of Metro Ethernet in Canada is most prevalent in large centres like Toronto and Montreal, says Alan Solheim, vice-president of product management at Ottawa-based DragonWave Inc., which manufactures the AirPair broadband wireless Ethernet bridges. Last summer, DragonWave inked a deal with Richardson, Tex.-based Covaro Networks Inc. to offer a wireless metropolitan Ethernet product, which would include both DragonWave’s AirPair gear and Covaro’s Etherjack technology, which is used in customer premise equipment to connect internal Ethernet networks to SONET, copper, DS3 and other carrier networks.
DragonWave says the deal will target both wireline and wireless telecom carriers.

Benefits include low cost

“At the end of the day everybody — whether it’s a civil servant working at their desk or an IT administrator — wants to deliver packet-data services,” says Solheim.
But early adopters tend to be larger corporations that want to interconnect local-area networks, he says.
There are still big challenges selling organizations on the benefits of Metro Ethernet, according to DragonWave. Most large enterprises still have a combination of time-division multiplexing (TDM) and packet-based services that need to be delivered, but they also need Ethernet services for data.
Companies, moreover, tend to change their buying habits slowly — usually when they have new requirements and need to re-evaluate their plans.
Analysts believe companies that do switch will find metro Ethernet offers benefits over other technologies. It is particularly attractive to enterprises with multiple locations because of its ease of deployment, lower cost and flexible network topology, Holbrook says.
He adds it also lets firms combine their voice, video and data traffic onto a single network. The relative ease with which WAN Ethernet is deployed is an advantage over legacy technologies, particularly for large enterprises with sprawling footprints.
Cost savings offered by Ethernet services are an advantage for all businesses, adds Holbrook. But, again, large enterprises with complex network needs are especially well-suited for both mesh network topology and hub-and-spoke network technology, as opposed to point-to-point topology typical of Frame Relay and ATM services.
Reliability is another advantage, according to The Yankee Group. Its 2005 survey of WAN Ethernet users showed improved network reliability is the main reason companies implement Ethernet over wide-area networks.
As enterprises replace legacy services with Ethernet, Holbrook says, they will demand even better quality of service standards for mission-critical applications, in turn inspiring carriers to make their networks even more reliable.

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Jim Love, Chief Content Officer, IT World Canada

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