IP to disrupt metro world

Research firm IDC asserts that established telecom equipment providers should prepare for change as Ethernet technology moves from its traditional local area network (LAN) heartland into the metro world.

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By  Simon Duddy Published  June 28, 2005

Research firm IDC asserts that established telecom equipment providers should prepare for change as Ethernet technology moves from its traditional local area network (LAN) heartland into the metro world. According to new research from IDC, the shift to internet protocol (IP) is being driven by next-generation broadband applications, including IPTV, video-on-demand, and triple play services that combine video with IP voice and high-speed internet access. IDC says the metro Ethernet equipment market reached US$1.7 billion in 2004 and will increase at a 26% compound annual growth rate (CAGR) through to 2009. “The migration from a legacy network infrastructure using Synchronous Optical Network (SONET) or Synchronous Digital Hierarchy (SDH) to metro Ethernet is well under way,” says Sterling Perrin, research manager for Optical Networks at IDC. “Growth over the next five years will be substantial, and metro Ethernet represents one of the most significant opportunities in wireline telecom infrastructure,” he adds. IDC says that the metro Ethernet equipment market will surpass that of the legacy SONET/SDH equipment by 2009. The firm asserts that incumbent telecom equipment suppliers will need to leverage the existing SONET/SDH infrastructure to address the Ethernet challenge. Ethernet over multiservice provisioning platforms (MSPPs), which combine the functionality of multiple networking elements, provide a less costly, more flexible network solution in the short term. Although MSPPs represent a good interim solution, major carriers will ultimately have to move away from MSPPs toward switched Ethernet networks. In the report Worldwide Metro Ethernet Equipment 2005-2009 Forecast and Analysis, IDC found that Cisco was well-positioned in the segment, that Asia/Pacific presents the best opportunity by geography and that Layer 2/3 switches and routers will dominate the revenue opportunities by product segment.

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