Both IP MPLS VPNs and Ethernet services grew at a combined 13% in 2011 to just over $50 billion, fueled by surging data traffic, cloud services, and cost-cutting initiatives, according to a new report from Infonetics. The research firm is predicting the market to surpass $81 billion in 2016.
“The move from legacy frame relay, ATM, and leased line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today’s highly interconnected, mobile, video- and cloud-oriented world,” notes Michael Howard, co-founder and principal analyst of Infonetics Research. “By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer.”
Some highlights:
- The growth rate of IP MPLS VPN and Ethernet service revenue soundly outdistances the growth rate of telecom service provider revenue (though actual service provider revenue is increasing).
- Asia Pacific is expected to overtake EMEA as the leading region for IP MPLS VPN services in 2012 and already leads in Ethernet services; Asia will remain the leader for the combined IP MPLS VPN and Ethernet services market going forward, led by China and India.
- Over 90% of spending on mobile backhaul equipment in 2011 was on IP/Ethernet gear.
