Half of all North American enterprises are now deploying carrier Ethernet services, with particular interest in VPLS-based Ethernet LAN services, says Phil Sayer, Forrester Research analyst.
There are three major areas in which the carrier Ethernet market is developing, says Sayer. Managed services, especially offering end-to-end management of servcie level agreements, will be standard parts of most carrier Ethernet offerings by the end of 2010, Sayer says.
 
E-LAN services based on VPLS also are getting traction, because users like their simplicity. E-LAN services are easy to configure and allow users to run their entire WAN/LAN infrastructure as though it were a single LAN managed by staff experienced in Ethernet LAN configuration.
 
Carrier Ethernet exchanges, which serve as hubs, enabling the interconnection of carriers through a single NNI connection and translating service characteristics from one carrier’s classifications to another, also are a growing trend.
 
Exchanges remove the complex and time-consuming challenges of establishing multiple, separate interconnection agreements between carriers.
 
Some 29 percent of North American enterprises surveyed said they had already deployed carrier Ethernet services, with no plans to expand, and 19 percent were expanding or upgrading their current deployment.
 
Over the last year, the percentage of enterprises deploying carrier Ethernet has grown 14 percentage points, a massive uptick over the past 12 months, says Sayer.
 
MPLS VPNs are still growing, but much more slowly. By way of comparison, this year 32 percent of enterprises said they had implemented MPLS IP VPNs, with no plans of expanding, and another 29 percent were expanding or upgrading them. In 2009, MPLS VPNs grew about three percentage points.
 
Ethernet access to MPLS VPNs or the Internet is used by 51 percent of North American enterprises.
 
"We expect that both Ethernet and MPLS will play important roles in enterprise networks for the foreseeable future, the choice depending on the type of application, speed required, geography, size of network, and enterprise strategy," says Sayer. "However, for networks of 50 sites or fewer and connection speeds of 10 Mbps or more, migration from MPLS IP VPNs to Ethernet networks makes a lot of sense."
 
Data from the survey shows that a total of 71 percent of enterprises will eventually migrate to MPLS IP VPNs, 48 percent to Ethernet networks built on point-to-point circuits, and 45 percent to a network using multipoint E-LAN services.
 
"With only a small number of exceptions, it’s clear that enterprises are building Ethernet networks not to replace MPLS VPNs but to run alongside them," says Sayer.
 
About 37 percent of respondents said they will replace a site-to-site MPLS-based VPN with Ethernet within a year. The leading application was for connections between data centers and headquarters buildings, with 19 percent of respondents say they would do so.
 
Connections just between major offices were mentioned by 16 percent of firms. About 17 percent of firms planned to use Ethernet to link distributed data centers.
 
Five percent plan connections to large storage locations. These are the highest speed links, typically running at speeds between 100 Mbps and 2.5 Gbps.
 
Firms tell us that they are using Ethernet connections so that they can operate backup data centers as part of the same LAN as their main data center and so that they can replicate databases between regional data centers, says Sayer.
 
Lower network and CPE costs, typically between 20 percent and 30 percent lower than MPLS IP VPNs, are Ethernet attractions. Simplicity and lower latency also are seen as advantages. Ethernet is simpler to configure than IP, and firms have Ethernet skills for managing their LANs. Lower latency results from less buffering, fewer queues, and less protocol overhead also are advantages.
 
Many firms also want to configure their own routers to keep control over security, routing, network architecture, and disaster recovery. They often do this by purchasing an Ethernet network and then putting their own IP routing layer on top.

by Alice Straight.