Provisioned Ethernet Services See Demand

Carriers are seeing rising demand for provisioned Ethernet services. In its quarterly earnings report last week, Alcatel disclosed that its metro Ethernet product has been "well received" and has been picked up by two customers.

While much of the demand for provisioned Ethernet services has been coming from the enterprise market, small business and home offices are being targeted by a new switch from Linksys, a division of Cisco Systems. Priced at about $250, the switch offers gigabit speeds and the ability to accept direct fiber-optic connections.

The switch includes two embedded gigabit ports as well as 24 10/100 Ethernet ports.

This kind of demand is fueling carrier investment to the tune of $3 billion last year, according to research firm Infonetics. Spending on metro Ethernet equipment is projected to reach $7.7 billion by 2007, the firm's research shows.

After three years (2001-2003) of decline, the Ethernet switch market has come back to life, according to research firm Dell'Oro Group. Driven particularly by price reductions for Gigabit Ethernet over copper, the switch market will show 14 percent growth this year, according to the Redwood City, Calif. firm. "Gigabit Ethernet over copper is seeing more widespread deployment in connecting desktop PCs to the LAN," said Seamus Crehan, director of Ethernet switch research.