Ethernet's invasion of the WAN challenges traditional telecom suppliers, according to IDC

Fiber Optics Weekly Update, Feb 13, 2004

The migration of Ethernet technology from the LAN to the metro, driven by continued growth in data traffic and sharp declines in the price of LAN switches and routers, is beginning to change the way carriers architect their networks and has the potential to disrupt the base of historical telecom suppliers, concludes a new study by IDC. Although it's only five years old, metro Ethernet is already a billion dollar market globally. Equipment vendors generated $1.1 billion in revenue in 2003 and IDC forecasts equipment revenue will increase at a 42 percent compound annual growth rate (CAGR) to reach $6.3 billion by the end of 2008--making it one of the strongest opportunities, in terms of both growth and revenue, in telecommunications.

For the second year in a row, IDC found that Cisco was the dominant vendor in the metro Ethernet market, followed by Nortel. In 2003, the two companies combined for 60 percent of the overall market. The leading metro Ethernet vendors for 2003 were as follows:

--Cisco 38.9 percent

--Nortel 21.3 percent

--Extreme 3.6 percent

--Lucent 2.4 percent

--Other 33.8 percent

The IDC study, Worldwide Metro Ethernet Equipment Forecast and Analysis, 2004-2008 forecasts the five-year revenue opportunity for metro Ethernet equipment from 2004 to 2008. IDC includes four different equipment types within its definition of metro Ethernet--Ethernet over metro WDM, Ethernet over SONET/SDH multiservice provisioning platforms (MSPPs), layer 2/3 switches, and routers. The study identifies market share leaders for 2003 for the metro Ethernet equipment market as a whole and for each of the four individual equipment segments. To purchase this document, email sales@idc.com.