Ethernet over DWDM on the rise

The availability of Ethernet over dense wavelength division multiplexing (DWDM), combined with the poor economy, has driven renewed interest in carrier-provided wavelength services, according to a new study from Frost & Sullivan released today.

In the new report, titled “U.S. Wavelength Services Market,” Frost & Sullivan measures that market at $1.2 billion for 2008 and predicts that the market will climb to $2 billion in 2014.

“There is growing demand from key verticals such as financial services, healthcare and government for native as well as Ethernet over waves services,” said Roopashree H., Frost & Sullivan analyst, in a statement.

Wavelength services have already outpaced SONET growth, the study found, attributing that phenomenon, in part, to Ethernet over waves and in part to customers seeking “a combination of higher bandwidth, reduced equipment requirements and savings on power consumption.”

Both the retail and wholesale sectors are driving the demand for Ethernet over wavelength products, researchers said. Specific applications driving this trend include videoconferencing, business continuity/disaster recovery, data center connectivity, and storage area networking, said the researchers.

Differentiating wavelength services is a challenge for service providers, the study found “The highly commoditized nature of wavelength services, as well as the fact that the service has so far been largely limited to the wholesale space and long haul services, has not forced service providers to offer much of value addition along with the service,” Roopashree wrote. “So most carriers in the market offer similar services, with the only differentiation being price--and price varies from customer to customer depending on the number of carriers competing in a given market and the size of the customer.”

Frost & Sullivan advised carriers to focus on delivering best of breed Ethernet over wavelength services that offer scalability and flexibility for fast-track business progression.