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IDC Forecasts Total U.S. Ethernet Revenue to Hit $9.2 Billion by 2016

November 01, 2012

IDC Forecasts Total U.S. Ethernet Revenue to Hit $9.2 Billion by 2016

By Rory Lidstone
TMCnet Contributing Writer

International Data Corporation (IDC (News - Alert)) today released a new study entitled "U.S. Carrier Ethernet Services2012-2016 Forecast," which predicts Ethernet services adoption rates to hit new heights within the next four years. The study analyzes the current U.S. enterprise Ethernet services market, discussing key trends and forecasting Ethernet revenue through 2016.

According to the study, Ethernet services' superior cost effectiveness, high-bandwidth scalability, ease of implementation and overall flexibility are what make it so appealing to a number of industry sectors. Indeed, while total U.S. Ethernet revenue should be about $5.2 billion for 2012, according to the report, that number will grow to $9.2 billion by 2016. The three applications that will primarily drive adoption during this period are datacenter connectivity, disaster recovery/business continuity and storage replication.

"Enterprises are increasingly utilizing 100Mb, gigabit, and even 10 gigabit Ethernet services for domestic and international WAN networking," said Nav Chander, research manager, Enterprise Communication Services. "We are seeing a lot more medium-size U.S. enterprises adopt Ethernet with more fiber availability, more service competition, and faster time-to-service compared to alternatives."

Another factor contributing to Ethernet demand is its use as an alternative to leased lines for access to other services — the Internet or IP VPNs, for example. Ethernet services are also typically much less expensive than private line or packet services, with lower equipment costs factoring into this.

Further findings from IDC's forecast include the fact that E-Line services make up just less than half of the Ethernet services revenue currently, while the Ethernet access market is likely to maintain growth rates over 20 percent throughout the forecast period.

Recently, IDC released its 2012 MarketScape report which profiles the leading providers in the worldwide enterprise social software market, which states that organizations are attempting to engage internal users and customers in an ongoing conversation.

In early October, the research firm released the results of a survey which states that the cloud as a standalone IT improvement solution is a top priority for 40 percent of U.K. enterprises.

Edited by Rich Steeves
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