The migration of Ethernet technology from the LAN to the metro is driven by the growth in data traffic and sharp declines in the price of LAN switches and routers. Metro Ethernet has the potential to disrupt the base of historical telecommunications suppliers, contends a new report from Framingham, MA-based IDC.
Despite its infancy, metro Ethernet is already a billion-dollar market worldwide. Equipment vendors generated $1.1 billion in revenue last year. According to IDC, equipment revenue will experience a 42% CAGR to net $6.3 billion by the end of 2008, making it one of the industry's strongest opportunities.
Cisco Systems led the metro Ethernet market for the second year in a row, capturing 38.9% of the market last year, followed by Nortel Networks with 21.3%. Extreme
Networks took the third-largest share at 3.6%, while Lucent Technologies captured 2.4%. All other vendors combined for 33.8% of the total market.
"The vendor landscape in metro Ethernet is markedly different from the overall telecommunications equipment landscape," notes Sterling Perrin, senior analyst, optical-network research. "Most traditional suppliers, with the exception of Nortel, are just now entering this market and will experience a large uphill climb to gain share. However, strength in metro Ethernet will be critical for traditional suppliers, as this segment is quickly becoming a major piece of overall service-provider spending."
For more details on the report, "Worldwide Metro Ethernet Equipment Forecast and Analysis, 2004– 2008," visit www.idc.com.