Providing carrier Ethernet worldwide

Ron Kline/Ovum
10 Oct 2011
OvumThe carrier Ethernet equipment market continues to grow, having reached $12.7 billion in 2010. Even though the market is growing strongly, deployments vary widely by region and by application, which has driven requirements in different directions, forcing vendors to think hard about where to place their R&D investments.
RAD Communications is one example of a small vendor trying to expand with the market by taking a focused approach and using internally developed ASICs for its EAD (Ethernet access device) NIDs (network interface devices). The technology allows the company to specifically configure its EADs for business services and mobile backhaul applications to lower costs for network operators. This is a must for any vendor competing in the $4.7 billion EAD market, which accounted for over one-third of all carrier Ethernet spending in 2010.
As noted in Ovum’s soon to be published “Market Segment Profile: Carrier Ethernet,” carrier Ethernet technology is being used more extensively in the established economies of North America, Western Europe, and parts of Asia-Pacific (Australia, South Korea, Japan) than in less-developed markets, including China, India, MEA, and SCA.
This presents two distinct sets of requirements for vendors: Operators that have deployed carrier Ethernet on a wide scale are interested in capabilities, such as operations, administration, and management features that help reduce opex, while operators in regions where carrier Ethernet is just beginning to see deployments are more interested in reducing capex.
In addition, carrier Ethernet requirements for the two major uses of the technology (business services and mobile backhaul) vary widely. Mobile backhaul networks require synchronization and timing (for handoffs between cell sites) and also the capability to support TDM (E1/T1) services. Business Ethernet services generally replace TDM and thus do not need to provide TDM or timing capabilities. A third set of capabilities is required for wholesale operators that make a business of providing carrier Ethernet access both for business services and mobile backhaul services.
It is critical for vendors seeking the widest possible addressable market to provide products and solutions that can be configured to support different applications and geographical preferences and that address specific customer needs. However, it often becomes difficult to address such a diverse market with a single product.


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