Traditional technologies such as asynchronous transfer mode (ATM), frame relay
and leased circuits are on their way out in most countries, making way for
new-age services such as Internet Protocol (IP)/Ethernet.

 

As the intensifying data center consolidation and wider adoption of
cloud computing are significantly raising the bandwidth requirements in data
centers, customers are increasingly opting for Ethernet for data center-to-data
center connectivity and multi-protocol label switching IP virtual private
network (MPLS IP VPN) for connecting to smaller branches.

The larger branches that are using MPLS are expected to gradually switch to
Ethernet due to the need for faster throughput speeds.

Although high-end MPLS circuits often compete against Ethernet services, they
have not made a substantial dent on the former’s revenue share. Once Ethernet
nodes become more ubiquitous, customers will switch to Ethernet services for
speeds in excess of 100 Mbps.

“Regulatory compliance will also have a considerable bearing on customers’
purchase decisions,” said Frost & Sullivan Research Analyst Mayank Kapoor.

 

Though enterprise data services have the benefit of advanced technology,
increasing competition and enterprise mobility have hampered their rapid
uptake. Growing enterprise mobility has made IP security (IPSec) and secure socket
layer (SSL) VPN attractive to small and medium businesses. The mobility factor
compels enterprise users to leverage the Internet to connect to corporate
networks, and this restrains the growth of private network services.

Further, high-speed broadband initiatives in countries such as Australia,
Malaysia, New Zealand and Singapore are likely to accelerate the decline in
wholesale prices, which will have a significant impact on the pricing of core
data services such as MPLS IP VPN and carrier Ethernet.

By Telecomlead.com Team
[email protected]