Embed Size (px)
DESCRIPTION
An analyst briefing presentation by Stratecast analyst Roopashree Honnachari on the retail/business ethernet services market.
Citation preview
Retail/Business Ethernet Services Market Update
Revenue Growth Continues even as Competition Heats Up!
Roopashree Honnachari, Program ManagerRoopashree Honnachari, Program Manager
Business Communication Services
Aug 11, 2011
Today’s Presenter
2
Roopashree (Roopa) Honnachari
Program Manager, Business Communication Services
Frost & Sullivan
Agenda
� Why Carrier Ethernet?
� How large is the market?
� Market Revenue Evolution, 2010 & 2015
� Market Ports Evolution, 2010 & 2015
3
� Market Demand Drivers
� Competitive Landscape, 2010
� Key Takeaways
Why Carrier Ethernet?Changing Communication Needs Of Today’s Business
Voice Internet VideoData Security
4
Data Backup/
Replication
Disaster Recovery
Distributed Enterprise
Cloud-based Services
CaaSSaaSIaaS
Why Carrier Ethernet? Convergence!
Pre-Convergence Post Convergence
FRAME
RELAY
FRAME
RELAY ATMATM
PRIVATE LINE
PRIVATE LINE
FRAME
RELAY
FRAME
RELAY ATMATM
PRIVATE LINE
PRIVATE LINE
FRAME
RELAY
FRAME
RELAY ATMATM
PRIVATE LINE
PRIVATE LINE
FRAME
RELAYATMPRIVATE
LINE
PRIVATE LINEPRIVATE
LINE
Frame Relay
Private Line
ATM
Ethernet
Managed IAD
5
� Multiple traffic-specific networks
� Multiple access lines per location
� Quality of Service (QoS) managed separately in each network
• A single converged network for all types of traffic
• Class of service (CoS) for traffic prioritization
Ethernet
Service Providers Network/Cloud
Why Carrier Ethernet? (continued)
• Familiarity in the LAN
• Scalable bandwidth (owing to switched network
architecture)
6
architecture)
• Cost-effective (lower per MB cost)
• Facilitates convergence of applications!
How Large is the Market?
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
4,000
8,000
Gro
wth
Ra
te (%
)
Re
ve
nu
e (
$ M
illi
on
)
Total Retail Carrier Ethernet Services Market: Revenue Forecast, U.S., 2008- 2015
7
2008 2009 2010 2011 2012 2013 2014 2015CAGR (10-15)
Revenue 1,139.6 1,561.7 2,188.1 2,975.8 3,957.8 5,066.0 6,332.5 7,725.7 28.7%
Growth Rate 37.0% 40.1% 36.0% 33.0% 28.0% 25.0% 22.0%
0.0%
5.0%
10.0%
15.0%
0
Gro
wth
Ra
te (%
)
Re
ve
nu
e (
$ M
illi
on
)
The growth is largely attributed to the market migration from legacy services—Leased
lines, Frame Relay and ATM to Ethernet services.
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Market Revenue Evolution, 2010 & 2015
60%
80%
100%
Reven
ue (
$ M
illi
on
s)
Market Evolution by Metro vs. Long Haul, 2010 & 2015
60%
80%
100%
Reven
ue (
%)
Market Evolution by Service Type, 2010 & 2015
8
2010 2015
Long Haul 23% 35%
Metro 77% 65%
0%
20%
40%Reven
ue (
$ M
illi
on
s)
2010 2015
E-LAN 32% 38%
E-Line 48% 44%
Access 20% 18%
0%
20%
40%
Reven
ue (
%)
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Market Ports Forecasts
15%
20%
25%
30%
35%
40%650,000
Gro
wth
Ra
te
Po
rts
Total Retail Carrier Ethernet Services Market: Ports Forecasts, U.S., 2008-2015
9
2008 2009 2010 2011 2012 2013 2014 2015CAGR (10-15)
Ports 104,697 139,756 185,027 242,872 313,936 401,316 506,283 628,857 27.7%
Growth Rate 33.5% 32.4% 31.3% 29.3% 27.8% 26.2% 24.2%
0%
5%
10%
15%
0
Gro
wth
Ra
te
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Market Ports Evolution (U.S.), 2010 & 2015
60%
80%
100%
Po
rts (%
)
Market Ports Evolution by Service Type, 2010 & 2015
40%
60%
80%
100%
Po
rts (%
)
Market Ports Evolution by Speed,2010 & 2015
10
2010 2015
E-LAN 26% 27%
E-Line 48% 48%
Access 26% 25%
0%
20%
40%Po
rts (%
)
2010 2015
10 G 3% 9%
1 GigE 18% 26%
100 M 36% 32%
10 M 43% 33%
0%
20%
40%Po
rts (%
)
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Market Demand Drivers
� Market migration from traditional private lines to Ethernet EPL and EVPL
services
� Growing market demand for Ethernet access to MPLS VPNs and Dedicated
Internet Access is fuelling revenue growth
� Increasing adoption of E-LAN services among verticals such as healthcare,
11
� Increasing adoption of E-LAN services among verticals such as healthcare,
education and government
� Enterprise adoption of Ethernet to access cloud-based services represents a
growing market opportunity for the service
� Layer 2 Ethernet services are complementing Layer 3 MPLS VPN networks for
multipoint-to-multipoint connectivity
MPLS or VPLS ?
VPLS
� Layer 2 VPN with Routing Control
� Scalable On-demand Bandwidth
� Ethernet is the default access
� Scale from 1M-100M on a 100M
port
It is not MPLS or VPLS, but MPLS and VPLS
MPLS
�Provider Managed Layer 3 VPN
� Multiple Access Options
�T1/T3,SONET, Ethernet, Wireless,
Satellite
12
port
� Ideal for < 100 sites
� (Regional & National)
� Ideal for High-speed Applications
� Data Center Connectivity
� Storage Area Networking,
Satellite
� Ideal for >100 sites
� (Regional, National & Global)
� Ideal for Distributed Connectivity
�geographically dispersed branch
offices, remote users, teleworkers, and
business partners
Competitive Landscape, 2010
AT&T
XO
Others
Total Retail Carrier Ethernet Services Market: U.S., 2010
�Regional carriers with their vertical specific
solution selling strategy and enhanced SLA
offerings will continue to see success.
�Cable MSOs offering metro Ethernet over
fiber networks have the potential of
successfully tapping into the high-speed
needs of local enterprises in their footprint.
13
Verizon
tw telecom
CenturyLink
Level 3
Cogent
XO needs of local enterprises in their footprint.
�EoC service providers are proving to be
invaluable in expanding Ethernet reach to
remote/non-fiber fed SMB customer
locations. However, the bandwidth/distance
limitations of the service restrict its suitability
to connect distributed customer locations at
sub 10 Mbps. Source: Frost & Sullivan analysis.
Key Takeaways
�Ethernet will continue to gain adoption as the de facto choice for replacement of
traditional transport technologies
�The ability of Ethernet to support convergence of applications (voice/video/data) is
expected to drive market adoption of higher port speeds, thus resulting in increased
revenue growth throughout the forecast period
14
�Cloud networking – to enable cloud services and access to them – will continue to
fuel service provider/enterprise adoption of Ethernet services
�While Carrier Ethernet will continue to see rapid adoption in the metro space, both
for E-Line and E-LAN type of services, MPLS VPNs will continue to dominate the
national/global multisite connectivity space. However, Ethernet will continue to play
a role in hybrid networks involving MPLS/EVPL/VPLS networks
Questions?
15
Next Steps
� Request a proposal for or Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of
your company. ([email protected]) 1-877-GoFrost (1-877-463-7678)
� Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com)
16
� Register for the next Chairman’s Series on Growth: Driving Innovation – The
What, Why, and How. Visions and Benchmarks as the Innovation Key
(October 5th) (http://www.frost.com/growth)
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep
abreast of innovative growth opportunities
(www.frost.com/news)
Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
What would you like to see from Frost & Sullivan?
17
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by rating this presentation.
Frost & Sullivan’s Growth Consulting can assist with your growth strategies
Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter
http://www.facebook.com/FrostandSullivan
http://www.linkedin.com/companies/4506
18
http://twitter.com/frost_sullivan
http://www.linkedin.com/companies/4506
http://www.slideshare.net/FrostandSullivan
For Additional Information
Mireya Espinoza
Corporate Communications
Information & Communication Technologies
(210) 247-3870
Craig Hays
VP of Sales, North America
Information & Communication Technologies
(210) 247-2460
19
Roopashree (Roopa) Honnachari
Program Manager
Business Communication Services
(210)-247-3860
