Are Ethernet Services The Next Big Thing?

It was only a matter of time before Ethernet broke out of the confines of the local area network (LAN) to become the next big thing in the wide-area network (WAN). After all, the same qualities that have made it the nigh-universal LAN technology since the 1970s have made metro Ethernet services a hot property, and providers are lining up to bring offerings to market.

"One of the main reasons why Ethernet is so popular in the LAN is that it is so simple, so flexible and really cost effective," Verizon Ethernet product manager Carlos Benavides says. "On the WAN, we can offer a very high bandwidth service with QoS (quality of service) at a cost-effective price."

The idea that the network on the other side of the enterprise firewall requires exactly the same kind of management expertise as the one on the inside is pretty compelling. "It means that, theoretically at least, the same network management tools can be used on both the LAN and the WAN," says Forrester Research telecom and networks group vice president Lisa Pierce. "Especially when you go downmarket, the likelihood that you'll have someone on staff who only knows LAN is higher."

Add to that the possibility of much more flexible provisioning, and it looks like Ethernet services could be a big seller. "I think people are excited by the possibility of being able to grow access dynamically, as needed," Pierce says. "Now, if you have a 100 Mbps line and want to grow to 1000 Mbps, for example you have to go through a whole provisioning process."

With converged applications like VoIP putting every heavier and constantly increasing loads on network connections, it's not surprising that Ethernet services have captured the interest of enterprises, if not, quite yet, their subscription dollars. However, that's going to change, according to a report released by Infonetics Research last month. The firm forecasts that the still-young Ethernet services market will surge 276% to $22.2 billion by 2009. That's not an inconsiderable amount of change representing a not inconsiderable amount of users.

For a company like Verizon, with 11.2 million miles of fiber optic cable, and more on the way, Ethernet services could represent the next big networking business opportunity - at least they hope so. The company has spent $73 billion in network upgrades since 2000, at least partly to address what it sees as an insatiable and growing demand for Ethernet.