Downturn hits Ethernet MAN switch market
The Ethernet metropolitan area network (MAN) switch market is being stifled by a lack of end user demand and funding brought on by the downturn in the networking space says In-Stat/MDR.
The Ethernet metropolitan area network (MAN) switch market is being stifled by a lack of end user demand and funding brought on by the downturn in the networking space. According to In-Stat/MDR, until venture capital and subscriber demand picks up, incumbent service providers and their equipment vendors will remain reluctant to deploy Ethernet MANs.
In spite of these setbacks, the research group still expects the Ethernet MAN switch market to reach end-use revenue of US$5.9 billion by 2006. This represents a compound annual growth rate (CAGR) of 56%.
“Despite the intimidating set of market conditions arrayed before ‘LAN-style’ Ethernet MANs, the truth is out there," says Lauri Vickers, manager of In-Stat/MDR's LAN group,
"The true extension of the LAN into the MAN space will take place, but it is most likely going to have to be done as an end-run around the existing service providers and their equipment vendors. They will not give up their high-margin services or equipment to the inevitable commoditisation of Ethernet without a fight," she adds.
In-Stat also reports that while Gigabit Ethernet will prove the dominant technology in the market, 10 Gigabit Ethernet will ramp up significantly and begin to take market share from Gigabit Ethernet.
The sector will be driven by a number of factors, including demand for downstream bandwidth, the increasing localisation of traffic, outsourcing trends and Ethernet’s ability to offer plug and play upgrades.