Global enterprise Ethernet services market to exceed US$31b in 2012
ConvergenceAsia staff
01/11/2007

According to Ovum, the global enterprise Ethernet services market grew 32 per cent in 2006, eclipsing US$9.8 billion, and will continue to expand at a rate of nearly 21 per cent annually, reaching $31 billion by 2012.
 
In 2006, Asia Pacific led the world in service volume, with over 300,000 ports and revenue of $5.5 billion, nearly 56 per cent of total global Ethernet services revenues. In 2007–2012, Japan and the US will account for nearly 59 per cent of revenues of $122 billion; Japan is still the largest market by far, followed by the US and the UK.

Japan is exhibiting mature market conditions, while many other countries are still moving through early adopter and “land grab” market phases, says Ian Redpath, Senior Analyst and co-author of the forecast analysis. “New entrant Ethernet service providers have been catalysts in starting market growth.”

In the US and the UK, in addition to “Ethernet pure play” carriers, cable companies are exhibiting solid growth, and the incumbents have responded forcefully. Fibre is still the physical access method of choice with increased building connectivity ongoing. Ethernet over copper and microwave are now also access options, according to the analysis.

Redpath explains, “Demand has not been limited to one vertical market sector but has been broadly based. The financial sector has been leading, with additional strength coming from legal, health care, media, manufacturing, and local governments. Though there is an extensive list of growth drivers, the key driver is that when a pre-existing legacy service contract comes due, the economics of shifting to Ethernet services are compelling.”

Ovum RHK’s updated analysis of the global enterprise Ethernet services market indicates continued strong growth. Both ports and revenues were up sharply in 2006, by 48 per cent and 32 per cent, respectively, and are forecast to grow at CAGRs of more than 20 per cent through 2012, according to Ovum RHK’s analysis.

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