Experts have dubbed 2005 the year of gigabit Ethernet as Australian businesses prepare for a "generational change" in technology.
Companies are assessing whether ISDN, Frame Relay and ATM should power their wide area networks (WANs) as the entry price for gigabit Ethernet continues to fall.
Dean Tognella, CEO of Optus subsidiary Uecomm, said interest in the technology has been gaining momentum since the NSW Department of Education and Training completed Australia's most advanced deployment 18 months ago.
"It is mature, carrier-grade technology. If you are still on ATM or Frame Relay you are paying too much," Tognella said.
"Ethernet delivers up to hundreds of times the bandwidth of a traditional WAN solution for around half the price; this literally means more bang for your buck.
"The key message is forget about bandwidth and focus on business applications and this technology will allow you to do this."
Uecomm products and marketing director Brendan Park admits Australia is still in the early stages of adoption estimating that penetration locally sits at less than 10 percent.
"The main barrier to adoption has simply been inertia with comms managers sticking with ATM, because there is no particular risk. However, upgrades will drive a generational shift," he said.
Household appliance company Asko recently upgraded, achieving 50 times the bandwidth for around half the price of its previous service while Leighton Contractors has introduced a metropolitan area network consisting of one 200Mbps fibre broadband connection, two 100Mbps fibre connections and one 2Mbps Ethernet over E1 connection.
Research firm Dell'Oro Group said it is the year of widespread Ethernet LAN switch upgrades in business networks with total revenue in 2005 from Ethernet gear reaching $US14.6 billion, a 7 percent increase over last year.
This will also be the biggest year for Ethernet since the height of the technology bubble in 2000, when the market reached $14.1 billion. The market then shrank for three consecutive years.
Dell'Oro says a new cycle of network upgrades, replacing gear that was put into corporate LANs more than five years ago, will drive the market growth. But today it is less about speeds and feeds and more about feature-rich upgrades to handle new requirements at the LAN edge, such as IP telephony.
Phil Hochmuth contributed to this report