network access...what's hot and what's not

Network access options surge and recede, with private lines potentially making a comeback and new technologies extending the life of copper pairs. Could the future be Ethernet-over-anything? We look at the trends in network access.

Network access options surge and recede, with private lines potentially making a comeback and new technologies extending the life of copper pairs. Could the future be Ethernet-over-anything? We look at the trends in network access.

private lines
You might think that the leased point-to-point circuits known as private lines are a relic of the pre-IP world, but a study by Insight Research suggests that this market could be set for a comeback as enterprise data traffic demands continue to soar. While revenues are expected to remain largely flat for the next couple of years, Private Line and Wavelength Services, 2010-2015 predicts the private line market will increase from $36 billion in 2013 to $38 billion by 2015.

Insight Research believes that as enterprises adopt more IP-based services the need for private lines to backhaul such data intensive traffic will increase. However, the chances of a similar revival in frame relay/ATM are non-existent. Over the last few years the factors behind the decline of these technologies have been well documented, for example in an Infonetics Research report that drew a direct correlation with increased demand for Ethernet services.

IP MPLS
Ovum reckons MPLS-based IP VPNs account for almost 90% of the market for site-to-site IP VPN services and in its latest research report (Next-Gen WAN Options), InformationWeek Analytics suggested that MPLS had high growth potential. More than 40% of respondents to its survey were considering deploying either MPLS, virtual private LAN services or Cisco's overlay transport virtualization (OTV).

Yet Lorna Garey, content director of InformationWeek Analytics also warned that MPLS was not cheap and could not do everything "especially when it comes to extending Ethernet outside the data center". She suggested that companies considering a WAN upgrade should also investigate other options.

Ethernet
Demand for Ethernet services to interconnect business sites and data centers continues to rise. The market is being driven by deployments related to Ethernet business connectivity, mobile backhaul, DSLAM backhaul and other applications. According to Vertical Systems Group, Orange Business Services tops its biannual Global Ethernet Leaderboard based on its reach and diverse service suite.

Heavy Reading's latest quarterly carrier Ethernet access platform (CEAP) market tracker found that the market grew 11% year-on-year to $850 million in the first half of 2011, compared to the same period in 2010. It also predicted that the market would have a compound annual growth rate of 11% through to 2016, when it would be worth nearly $3 billion.

Prospects for Ethernet look even rosier with the introduction of Ethernet in the first mile (EFM) services, where Ethernet is run over copper. By bonding copper pairs, 100Mbps is possible over short distances but in practice, most commercial services are synchronous 5, 10 or 20Mbps.

VDSL
Very high bit rate DSL (VDSL) is generating a lot of interest, with a report from IHS iSuppli indicating that global subscriber numbers increased by almost 50% last year to 23.3 million from 15.6 million in 2009. The report predicts there will be more than 60 million subscribers by 2014.

Some major European carriers have hitched their wagons to the technology, but the focus appears to be on delivering peer-to-peer file sharing, online gaming, streaming audio and IPTV. However, a number of small broadband providers are offering VDSL2 to business users, with 40Mbps downloads and 10Mbps uploads on offer. Pricing tends to be comparable with business ADSL.

satellite broadband
According to satellite market research specialist NSR, demand for broadband VSAT networking services has held up well over the last couple of years, although this growth has not been driven exclusively by enterprise demand. For example, Latin American government rural connectivity and school network projects boosted demand in 2009.

NSR predicts that broadband VSAT networking, satellite broadband access and broadband trunking & backhaul services will be worth almost $8.8 billion by 2019, which would represent an increase of 135% from 2009. Global satellite broadband access is expected to generate the most new revenues (more than $4 billion between 2009 and 2019) to become the leading market segment and bypass traditional broadband VSAT networking in revenue terms by 2013.

fiber to the building
In its PON, FTTH, and DSL Aggregation Equipment and Subscribers report for Q4 2010, Infonetics Research underlined the extent of the shift from copper to fiber by reporting a fall in DSL aggregation equipment revenue of 1.6% from the previous quarter while PON equipment revenues increased by 6.5%. The report found that operators in China in particular were continuing to invest heavily in EPON and GPON FTTX equipment. "The biggest spending increase for the year was in passive optical network equipment as service providers upgrade their networks to support premium data services," noted Jeff Heynen, directing analyst for broadband access at Infonetics Research.

To find out more about Orange Business Services' unparalleled global footprint, go to our coverage map: http://www.orange-business.com/en/mnc2/about-us/coverage-maps/. This is an updated version of an article that first appeared in Enterprise Briefing, the monthly newsletter from Orange Business Services.