IP MPLS VPN, Ethernet services markets grow

CALIFORNIA, USA: The worldwide IP MPLS VPN and Ethernet services markets continued growing throughout the economic downturn in 2009, says market research firm Infonetics Reseach.

Infonetics Research released its biannual, '2010 Ethernet and IP MPLS VPN Services' report, which tracks service provider revenue derived from wholesale and retail Ethernet services and layer 2 and layer 3 IP MPLS VPN services.

Michael Howard, co-founder and principal analyst, carrier and data centre networks, Infonetics Research, said: “Carrier Ethernet Exchanges are an important new development that facilitate Ethernet connections and accelerate the move to Ethernet transport and services."

Worldwide, service providers generated $20.8 billion from Ethernet services in 2009, a 23 percent jump from 2008.

"The exchanges work like this: service providers pay small fees to a carrier Ethernet exchange to make it easy for them to locate, buy, and provision Ethernet connections from each other," adds Howard.

The report adds that IP MPLS VPN service revenue increased 12 percent in 2009 over 2008.

"This in turn jumpstarts more Ethernet services and more of the IP VPN services that ride on Ethernet transport. The net effect of these new Ethernet exchanges, combined with fast-rising mobile backhaul connections, is a quickening of the Ethernet and IP VPN services markets, and as a result, we have raised our revenue forecasts,” notes Howard.

Combined, Ethernet services and IP MPLS VPN services are forecast by Infonetics to hit $68.2 billion in 2014.

Healthy growth in the market is expected as organizations increasingly look to IP MPLS VPN services to control WAN costs in the face of rising bandwidth needs, to Ethernet for the lowest cost-per-bit, and to managed layer 2 and layer 3 services.