Almost 40 percent of 717 European enterprises, small business and medium-sized businesses surveyed by Forrester Research (News - Alert) are now deploying carrier Ethernet services, with particular interest in VPLS-based Ethernet LAN (E-LAN) services, according to Forrester Research analyst Phil Sayer. In principle, Ethernet services can replace IP VPNs using MPLS, but Forrester tends to find organizations are using both, with Ethernet being used for high-speed circuits. 

 

Carrier Ethernet (metro/long-haul E-Line/E-LAN) services are growing rapidly, as 24 percent of European enterprises said they had already deployed carrier Ethernet services, while 14 percent were deploying or upgrading them.

 

This is a big leap over 2009 adoption of only 24 percent and represents more than 50 percent growth over the past 12 months, said Sayer. 

 

Use of MPLS VPNs is growing, but much more slowly. By way of comparison, this year 35 percent of enterprises said they had implemented MPLS IP VPNs, and another 30 percent were expanding or upgrading them. In 2009 the corresponding figure was 60 percent, suggesting a growth rate of just five percent. 

 

Some Ethernet enthusiasts have talked of carrier Ethernet entirely replacing MPLS IP VPNs, but in Forrester's view such talk is premature, if not plain wrong, Sayer said. 'We expect that both Ethernet and MPLS will play important roles in European enterprise networks for the foreseeable future,' he said. 

 

For networks of 50 sites or fewer and connection speeds of 10 Mbps or more, migration from MPLS IP VPNs to Ethernet networks makes a lot of sense, Sayer said. 

 

Some 39 percent of enterprises have already implemented an MPLS IP VPN, and by the end of 2010, this proportion will have risen to 54 percent. About 15 percent of respondents have no plans for MPLS VPNs.

 

About 15 percent of respondents have implemented a network based on Ethernet point-to-point circuits. By the end of 2010, this proportion will have risen to 24 percent, with another 22 percent growth  following in later years, Sayer said. 

 

Some 31 percent of respondents have no plans for a network based on Ethernet point-to-point circuits, while 11 percent use a multipoint Ethernet network. By the end of 2010, this proportion will have risen to 19 percent, with another 25 percent growth in following years.

 

Sayer said a total of 77 percent of enterprises will eventually migrate to MPLS IP VPNs, 46 percent to Ethernet networks built on point-to-point circuits, and 44 percent to a network using multipoint (E-LAN) services. 'It's clear that with only a small number of exceptions, most of the Ethernet networks that enterprises are building are not replacements for MPLS VPNs but are running alongside them,' he said. 

 

The top use for Ethernet was data center interconnection. Some 18  percent of firms planned to use Ethernet to link distributed data centers. About nine percent listed connections to large storage locations. Those links typically run at speeds between 100 Mbps and 2.5 Gbps. 

 

'Firms tell us that they are using Ethernet connections so that they can operate backup data centers as part of the same LAN as their main data center and so that they can replicate databases between regional data centers,' Sayer said. 

 

Connections between data centers and headquarters buildings was the driver for 17 percent of connections. Another 17 percent use Ethernet to connect major firm sites. The least popular use for Ethernet for the next year was to connect most offices, with just five percent planning to use that application

 

Respondents told us the primary benefits are lower network and customer premises equipment costs, with overall savings between 20 percent and 30 percent compared with MPLS IP VPNs, higher in some cases, Sayer said. 

 

Ethernet networks also are simpler and feature lower latency. Ethernet is simpler to configure than IP, and firms have Ethernet skills for managing their LANs. Many firms also want to configure their own routers, to keep control over security, routing, network architecture, and disaster recovery, and Ethernet helps them in that regard, as well.