U.S. Ethernet Service Ports Jump 26% in 2013

LEADERBOARD analysis shows port growth driven by Ethernet access to IP/MPLS VPNs and Cloud connectivity; Top providers already MEF CE 2.0 certified

BOSTON, MA, FEBRUARY 19, 2014 Ā ā€“Ā  U.S. installations of Ethernet service portsĀ jumped 26% in 2013,Ā according toĀ research from Vertical Systems Group in conjunction with year-end LEADERBOARD market share results. This growthĀ figure includes allĀ Ethernet portsĀ installed last year by business customers in the U.S.

Ranked by port share, the nine providersĀ onĀ Verticalā€™sĀ 2013 U.S. Carrier Ethernet LEADERBOARD are AT&T, Verizon, tw telecom,Ā CenturyLink, Time Warner Cable, Cox, XO, Comcast and Level 3.

Port growth wasĀ led by strongĀ market demand for higher speed Ethernet access to Dedicated IP/MPLS VPN sites. Layer 2/3 service interconnection available fromĀ each of the market-leading Incumbent Carriers and Competitive Providers is positioned as a network migration solution for existing VPN customers. As a result, this was the fastest growing applicationĀ overall in 2013 based on new ports installed. Cable MSOs drove port growth by targeting small and medium businesses within metro markets with aggressive offers to upgrade lower speed Internet and point-to-point connections to Ethernet.

callout-26percentCloud and data centerĀ connectivity were key applications for 1 Gbps and 10+ Gigabit Ethernet services. Driven by ongoing IT virtualization, there was an uptick in customer purchases of higher speed Ethernet ports during the second half of last year. Ethernet over direct fiber was the most widely deployed access technology for these implementations due to customer requirements for bandwidth scalability and application performance.

ā€œThe pace of Ethernet customer port installations in 2013 exceeded expectations,ā€ said Rosemary Cochran, principal at Vertical Systems Group. ā€œMigration of legacy services to Ethernet continued to be the most significant market driver, while cloud connectivity more clearly emerged as a strategic growth opportunity for higher speed Ethernet offerings.ā€

Delivery of Ethernet over fiberĀ increased in 2013 as providers activelyĀ broadened their on-net service footprints. Ethernet providers also expanded use of EoC and other access alternatives, in addition to NNI (Network-to-Network) partnerships and wholesale agreements. In response toĀ competitive pressures, providers also focused on improving their Ethernet installation and support processes.

A related finding from the 2013 LEADERBOARD analysis is that the top-ranked company in each of the three Ethernet provider segments has already gained MEF CE 2.0 service certification;Ā AT&T (Incumbent Carrier), tw telecom (Competitive Provider) and Time Warner Cable (Cable MSO). Additionally, the fastest growing company on the LEADERBOARD, Comcast, was the first to be CE 2.0 certified. CE 2.0 is a Metro Ethernet Forum (MEF) framework for facilitating Ethernet deployments, including service delivery across multiple networks.

Vertical Systems Groupā€™s ENS Research Programs feature web-based access to hundreds of research topics, plus analyst support for your ad hoc requests or consultations. As a comprehensive resource for business or product planning, ENS covers enterprise customer migration across all broadband network services to provide you with more defensible analysis as compared to discrete market forecasts. Research Tracks include @Ethernet, @Access, @Dedicated IP VPNs, @Fiber, @Dynamic Network Connectivity Services, @Private Lines, @Frame Relay, @ATM, @STATFlash, @Insight and more. Contact us for subscription information and pricing, or to schedule an ENSĀ demo.

Vertical Systems Group is recognized worldwide as a leading market research and strategic consulting firm specializing in defensible quantification of the networking industry. For more information see www.verticalsystems.com and follow us on Twitter. To speak to an analyst at Vertical Systems Group, please contact us.

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