Excerpts from Infonetics Research's 2012 Ethernet and IP MPLS VPN Services report suggests that the IP MPLS VPNs and Ethernet service markets will hit a combined total of $81 billion by 2016.
Infonetics, a market research firm, analyzed the market for both managed and unmanaged layer 2 and layer 3 IP MPLS VPN services, as well as wholesale and retail Ethernet services, in order to make short-term and long-term forecasts.
Michael Howard, the firm's co-founder and principal analyst, explained that the migration from legacy frame relay, ATM, and leased line services to Ethernet and IP services is accelerating. Businesses intent on maintaining competitiveness in the highly-interconnected, mobile, video- and cloud-oriented world were hastening the move to the newer mediums.
"By 2015, ATM and frame relay will virtually vanish," Mr. Howard predicted, "While private leased lines will be around a bit longer."
According to Mr. Howard, Europe's 2011-2012 slowdown was not going to slow the "solid growth" of both IP MPLS VPNs and Ethernet services. He predicted that the two services together would reach $81 billion worldwide in four years.
Cost-cutting initiatives, cloud services, and surging data traffic fueled the growth of Global Ethernet and MPLS IP VPN. Their service revenue grew a combined 13% in 2011 to just over $50 billion. In comparison, the growth rate of telecom service provider revenue is a distant second, even though actual service provider revenue has been increasing.
In addition, according to Infonetics Research, the Asia Pacific region already leads the EMEA in Ethernet services. Asia will be expected to become the leading region for IP MPLS VPN services by 2012. It will also remain the leader for the combined IP MPLS VPN and Ethernet services market, with China and India leading the market. IP/Ethernet gear accounted for 90% of mobile backhaul equipment expenditure in 2011.
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