The enterprise appetite for Carrier Ethernet services appears to be insatiable. After a slow start in 2004 to 2006, use of various flavors of Ethernet services has skyrocketed to a whopping 73% across all industries (see chart below). Usage of Ethernet services is up even more dramatically in some sectors, including higher education, and state and local government.
Source: Nemertes 2009 Benchmark (Ethernet Deployment Trends)
What's driving the demand? In a nutshell, telecom service providers understand that enterprises perceive Carrier Ethernet to be a "cheap and cheerful" service: low-cost, high-bandwidth, easy to manage, and the ultimate in flexibility.
Specifically, enterprises continue to grapple with flat or declining IT budgets. Eighty percent of companies benchmarked by Nemertes Research in the spring of 2009 (see chart below) say their IT budgets are flat to declining, and 70% said Ethernet's cost justified its deployment.
Source: Nemertes 2009 Benchmark (Ethernet Deployment Trends)
Yet at the same time, bandwidth requirements continue to rise (an average of 34% year-over-year in 2009). What's driving the growth? Increased reliance on collaborative applications across a distributed user base, for one -- meaning that users increasingly share data across the WAN. These are often multimedia applications, including video conferencing and video streaming, and thus require extremely high bandwidth and low latency.