Summary
Ethernet technology, which accounts for more than 90% of enterprise LAN installations, is now gaining traction in metropolitan and wide-area networks too. This overview is important for analysts and investors interested in business oportunities that Metro Ethernet technology provides in today's market.
Analysis
Business customers are seeking higher WAN access speeds to alleviate the bottleneck in the access network between the corporate LAN and WAN service to satisfy multimedia and business continuity requirements. For their part, network service providers are discovering that they can leverage Ethernet's high speeds, widespread interoperability, and economies of scale to reduce capital and operating expenses and to grow their service portfolios. One technology enabler is the availability of "Carrier Ethernet" products, a class of Ethernet infrastructure equipment that supports carrier-grade quality of service (QoS), availability, restoration times, and service management.
Metro Ethernet services comprise two primary categories:
* Ethernet virtual leased lines. These services function like point-to-point links between individual pairs of enterprise sites, between enterprise sites and the public Internet, and between enterprise sites and non-Internet WAN services, such as Multiprotocol Label Switching (MPLS) VPNs.
* Virtual private LAN services (VPLS). These make all intersite connections appear as one large LAN.
User and service provider plans for Metro Ethernet services are in the ramp-up phase. Interest by both groups is high, but deployments are in the early stages. From the enterprise perspective, the reason has mostly to do with a lack of consistent service availability across all enterprise sites that might require it. Though several large incumbent carriers have deployed Metro Ethernet services in the U.S. and Europe, just 42% of the carriers declared they were already in widespread production and/or in the implementation process of making Metro Ethernet services available. The spotty service availability has a few legitimate excuses: Deployment of high-cost fiber to the premises in most parts of the world is still in its infancy, and Carrier Ethernet infrastructure equipment - which brings enhanced levels of service management, uptime, and reliability to traditional Ethernet in the LAN - become available only recently. It takes some time for large network service providers to get their carrier-class Ethernet infrastructures installed and deployed across their entire serving areas, which can be global in nature.
While users view high-speed access at lower cost points as their primary motivation for considering Metro Ethernet, they also claim high costs as their No. 1 concern. The seeming paradox may be due to the fact that users, who are long familiar with the economies and simple operations of Ethernet, hope that the economies of scale will port over to metro- and wide-area Ethernet services. However, since a good number of them do not have much experience with such services yet, they worry that service providers will charge a premium, at least in the early days.
Finally, enterprises and users alike think the near-term sweet spot for services lies between 1Gb/s and 10Gb/s. Theese speeds are substantially higher than what is available with DSL and cable modem technologies and can surpass traditional time division multiplexing (TDM) access capabilities, such as T1/E1 and T3/E3 services, with simpler and much lower-cost Ethernet alternatives.
