Ethernet equipment

Carrier Ethernet Still Ramping

NEW YORK -- Ethernet Expo 2008 -- The market for carrier Ethernet infrastructure is still set to nearly double during the next five years, but the value of the market by 2012 will be somewhat below previous expectations due to increasing vendor competition and prevailing economic conditions, Heavy Reading senior analyst Stan Hubbard told a packed Ethernet Expo audience Monday morning.

Discussing the latest market trends and forecasts, Ethernet specialist Hubbard said he had revised his carrier Ethernet Switch Router (CESR) market growth projections for the next five years to reflect current economic conditions and the increasing price pressure that vendor competition is having on the market.

Hubbard said the market was worth $1.9 billion in 2007, and is on course to being worth more than $2.1 billion this year. But with more and more vendors entering the market -- the number of players is set to grow from 16 currently to 21 in a year's time, according to Hubbard -- and carrier spending likely to be squeezed slightly in the coming years, the market in 2012 is now on course to be worth $3.74 billion, compared with the previous forecast of about $4.3 billion.

That still represents a lot of business to be won in the coming years, though, and Hubbard believes there will be enough differentiation between the 20-plus different vendors--– with some focusing on specific capabilities such as Provider Backbone Bridging (PBB), PBB Transport Engineering (PBB-TE), or MPLS-TP (Multiprotocol Label Switching (MPLS) Transport Profile) -- for each to find a place in the market. (See Transport MPLS Gets a Makeover and A Guide to PBT/PBB-TE.)

That growth is being driven by increasing interest from enterprise users in Ethernet services, which in turn is attracting more and more operators into the market, noted Hubbard, who said more than 450 service providers and other organizations (such as government departments) have now invested in carrier Ethernet equipment. That increasing interest means that, in about two years to three years' time, almost 10 percent of all service providers will be offering some sort of Ethernet service to their customers, reckons Hubbard.

There's still plenty of work for the carrier Ethernet community to do to meet service provider and enterprise customer needs, though, with the focus still very much on the key areas of operations, administration, and maintenance (OA&M), Quality of Service (QoS) and Class of Services (COS) capabilities for service-level agreement (SLA) management, and network-to-network interworking. (See Nokia Siemens Shares Ethernet Secrets.)

— Ray Le Maistre, International News Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:29:13 PM
re: Carrier Ethernet Still Ramping I don't know... with 20+ vendors and what's likely to be a period of carrier belt-tightenting, plus the propensity of service providers to tend toward the big vendors anyway ... it's hard to see this market not having a huge shakeout during the next five years.
stuartb 12/5/2012 | 3:29:13 PM
re: Carrier Ethernet Still Ramping Irrespective of all the industry hype for PBT and v/MPLS, the "carrier belt-tightenting" as you call it will ensure the continued dominance of Ethernet over SONET/SDH (EoS) and the EoS vendors.
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