Asia Pacific leads Ethernet adoption spending $5.5 billion in 2006

Japan is still the largest market by far

Global enterprise Ethernet services grew 32 percent in 2006 with the Asia Pacific region accounting for more than 50 percent of the total volume.

The Ethernet market eclipsed $9.8 billion last year, according to a report released by Ovum yesterday. And it will continue to grow at a rate of nearly 21 percent annually topping $31 billion by 2012.

The Asia Pacific led the world in service volume with over 300,000 ports and revenue of $5.5 billion, nearly 56 percent of total global Ethernet services revenues.

However, according to Ovum, this is likely to change over the next five years. In 2007-2012, Japan and the US will account for nearly 59 percent of revenues of $122 billion; Japan is still the largest market by far, followed by the US and the UK.

Senior analyst and co-author of the report, Ian Redpath, said Japan is exhibiting mature market conditions, while many other countries are still moving through early adopter and 'land grab' market phases.

"New entrant Ethernet service providers have been catalysts in starting market growth."

"Demand has not been limited to one vertical market sector but has been broadly based. The financial sector has been leading, with additional strength coming from legal, health care, media, manufacturing, and local governments.

"Though there is an extensive list of growth drivers, the key driver is that when a pre-existing legacy service contract comes due, the economics of shifting to Ethernet services are compelling."

Evidence of Australia's growing interest in Ethernet was demonstrated in August when Uecomm became the first Australian carrier to join the Metro Ethernet Forum (MEF), an industry body comprising more than 120 organisations across the globe.

The MEF is working to accelerate the worldwide adoption of Carrier-class Ethernet networks and services, and to promote interoperability and standards.

Market Clarity CEO, Shara Evans, said the deployment of high speed broadband in Australia will also push the growth of Ethernet in coming years.

"Having followed the MEF's standards work for many years now, I've seen first hand how the MEF's work has transformed Ethernet from a LAN technology to a robust, carrier grade service architecture complete with QoS, resiliency, and other features required for enterprise networks," she said.

Also last month, Rad Data Communications and 23 other telecommunications industry providers participated in the largest and most diverse public Carrier Ethernet multi-vendor interoperability test ever staged. Organized by the European Advanced Networking Test Center (EANTC), the test was conducted at the Carrier Ethernet World Congress 2007 in Geneva.

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