Wednesday, June 08, 2005

Business market stoked for Ethernet services


NETWORK WORLD NEWSLETTER: OPTICAL NETWORKING
06/08/05

Dear networking.world@gmail.com,

In this issue:

* Ethernet services on fire
* Links related to Optical Networking
* Featured reader resource
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Today's focus: Business market stoked for Ethernet services

By Jim Duffy

There might be no hotter data service now than Ethernet. The
worldwide market for Ethernet services was $2.5 billion in 2004
and is expected to more than double this year, according to
Infonetics Research. From there, Ethernet service revenue is
expected to jump another 276% by 2009 to $22.2 billion.

Many billows are stoking this fire.

On the customer side, companies are hungry for more bandwidth
and looking to reduce WAN costs. Ethernet offers a way to do
both because of its bandwidth capacities and relatively
inexpensive prices per bit.

On the service provider side, carriers also are looking for ways
to connect their various sites with higher bandwidths at an
inexpensive price per bit, and Gigabit Ethernet point-to-point
wholesale services meet this demand.

On the equipment side, carrier-class improvements have been made
to Ethernet products that are enabling service providers to
offer new Ethernet services, including those with QoS and
service-level agreements. These are usually the chief selling
points of the traditional private line, frame relay and ATM
services that they are now beginning to replace, Infonetics
says.

According to Vertical Systems Group, the top five sources of
Ethernet service ports based on enterprise customer
installations are:

* T-1 Internet access, the leading source of Ethernet ports
  because of ease of service migration coupled with demand for
  higher speed connections to the Internet.
* Bandwidth-hungry new or "greenfield" applications.
* Migration from ATM ports at rates of T-3 and above.
* Migration from site-to-site dedicated IP VPNs.
* Conversions of T-1 frame relay ports.

Combined, these five sources represent 77% of the U.S. Ethernet
port base in 2004, according to Vertical. This type of demand is
prompting all major carriers to morph their traditional
Transparent LAN Services (TLS) into more flexible, variable and
reliable Ethernet services. It's even igniting a resurgence in
previously bankrupt service providers such as Yipes Enterprise
Services. Yipes received $24 million in new funding two months
ago, bringing the total to $94 million in what it has raised
since emerging from bankruptcy three years ago.

There are several flavors of Ethernet service. Ethernet is
essentially an application on top of an existing transmission
technology, such as SONET or leased lines. It is also available
on pre-standard technologies such as Resilient Packet Ring, or
in a network layer technology like IP/MPLS. Ethernet also can be
offered as a standalone service on copper or fiber, or delivered
on a wavelength over Dense Wavelength Division Multiplexing
(DWDM) services.

Ethernet also is offered as a switched service shared by many
companies over a public network, or a dedicated service for
corporations desiring an exclusive facility.

Loyola University in Maryland uses a switched Ethernet service
from Verizon to tie in remote campuses and give them all of the
technical resources available at the main campus in Baltimore.
The school has three remote campuses, between two and 20 miles
away from the main campus, in Timonium, Columbia and Belvedere
Square.

The school picked TLS because it was an extension of Loyola's
Ethernet infrastructure.

"Our fundamental strategy is we want one campus with multiple
locations," says John McFadden, CIO and assistant vice president
of technology services at Loyola.

Loyola had also "maxed out" the DS-3 ATM links between campuses
and experienced some reliability issues with ATM, McFadden says.

"When we did have troubles they were always tough to pin down,"
he says. "Ethernet is easier to troubleshoot."

For the full story, please go to:
<http://www.networkworld.com/news/2005/060605-ethernet.html?nlo>
_______________________________________________________________
To contact: Jim Duffy

Jim Duffy is managing editor of Network World's service provider
equipment coverage
<http://www.networkworld.com/topics/service-providers.html>. He
has 18 years of high-tech reporting experience, including over
12 years at Network World. Previously, he was senior editor at
Computer Systems News and associate editor/reporter at
Electronic News and MIS Week. He can be reached at
<mailto:jduffy@nww.com>.
_______________________________________________________________
This newsletter is sponsored by Oracle
Are you plugged into the Grid?

The search for cheaper, better application environments is
prompting companies to plug into a grid--grid computing, that
is. This "virtualized" approach to running critical software
lets companies harvest underutilized computing power and respond
faster to business-process change. But you don't just flip a
switch. Learn why from IDC analyst Dan Kusnetzky.
http://www.fattail.com/redir/redirect.asp?CID=106169
_______________________________________________________________
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