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Datacenter, VPN, and Cloud Service Connectivity to Drive U.S. Ethernet Revenues to $10.1 Billion by 2017, IDC Says

10/02/2013 | 08:32am US/Eastern

Adoption rates for Ethernet services are soaring, propelled by superior cost effectiveness, high-bandwidth scalability, greater availability, and overall flexibility for connecting to cloud and datacenter virtualization applications. According to new a forecast from International Data Corporation (IDC), total U.S. Ethernet revenue will increase from $6.2 billion in 2013 to $10.1 billion in 2016.

Enterprises across all major verticals are utilizing Ethernet services for domestic and international wide area network (WAN) and metro area connectivity, as well as for access to other services, such as connecting to the Internet, IP VPNs, and cloud service providers. The primary drivers of Ethernet adoption among U.S. enterprises are high-bandwidth applications, such as datacenter inter-connectivity, disaster recovery/business continuity, and data storage replication. Enterprises rank security as one of the most important features of Ethernet, followed by access to IP VPN, and service monitoring and reporting.

"Today Enterprises are increasingly utilizing 100Mb, Gigabit, 10 Gigabit, and even some 40 Gigabit Ethernet services for their domestic and international WAN networking," said Nav Chander, Research Manager, United States Enterprise Communication Services. "We are also seeing a lot of U.S. enterprises upgrading their Ethernet bandwidth and adding more applications and business locations on net because of the economics and faster time-to-service compared to the alternatives. Together, these trends will enable enterprises to converge their communication platform requirements with Ethernet."

Additional findings from IDC's research include the following:

  • E-Line services make up slightly less than half of Ethernet services revenue at present
  • The Ethernet access market will maintain growth rates above 21% during the forecast period driven by growth in mobile backhaul, IP VPN, dedicated internet access services, and Ethernet VPN to cloud service providers
  • Implementation of high bandwidth Ethernet connectivity between datacenters is one of the fastest growing requirements among enterprises
  • More medium-sized enterprises are also adopting Ethernet as they migrate to VoIP, employ storage networking, and access cloud-based services

The IDC study, U.S. Carrier Ethernet Services 2013-2017 Forecast (IDC #243425), analyzes the U.S. enterprise Ethernet services market. In addition to discussing key trends, it forecasts Ethernet ports/circuits and revenue through 2017. Data is segmented by E-Line, E-LAN, and Ethernet access services -- and then further 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).

To purchase this study, please contact IDC Sales at 508-988-7988 or sales@idc.com.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

Nav Chander, 508-988-7944
Michael Shirer, 508-935-4200

© Business Wire 2013
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