Gigabit Ethernet market to boom by 2005

Gigabit Ethernet over the next few years will evolve from a corporate network backbone into a technology of choice for service providers seeking to build relatively simple, inexpensive metropolitan- and wide-area networks, according to a report released Oct. 31 by market research firm Pioneer Consulting LLC.

In addition to offering service providers cost savings that may be passed on in the form of lower customer bills, Gigabit Ethernet will allow carriers to deliver just the bandwidth a customer needs, right when they need it, said Doug McEuen, the Pioneer analyst who wrote the report.

“Carriers can provision a network connection within minutes, instead of months like SONET (today’s commonly used Synchronous Optical Network technology). As a consumer, I can call up and ask my carrier to give me twice as much bandwidth between 2:00 and 4:00 because I’m having a videoconference,” McEuen said.

By the end of 2005, service providers and corporations together will spend a total of US$30.6 billion per year on equipment for 1Gbps (gigabits per second) Gigabit Ethernet and US$13.5 billion on still-emerging 10-Gigabit Ethernet technology, Pioneer estimated in its report. The total, US$44.1 billion, represents cumulative growth of 856 per cent from 2001 revenue estimated at about US$4.6 billion. By that time, the greater part of Gigabit Ethernet use will be in service-provider networks rather than corporate LANs (local area networks), McEuen said.

Over the same period, worldwide sales of all Ethernet equipment – 10Mbps, 100Mbps, 1Gbps and 10Gbps – will grow from US$17.3 billion to US$145.2 billion, Pioneer estimated.

Much of that expansion will come from outside the U.S. Whereas in 2001 North America will represent 80 per cent of the Gigabit Ethernet market, in 2005 it will be only 45 per cent, Pioneer reported.

The fastest growth in Gigabit Ethernet adoption will occur in Europe, McEuen said. With a large number of dense metropolitan areas and a large existing deployment of SONET rings, European service providers are likely to find Gigabit Ethernet an attractive and relatively easy upgrade.

Asian carriers will also adopt the technology rapidly, though not as fast as Europe’s, because the large installed base of Frame Relay and ISDN (Integrated Services Digital Network) systems there will be more difficult to replace with Gigabit Ethernet. In Latin America, meanwhile, high-speed carrier networks are just getting off the ground in many areas and Gigabit Ethernet could leapfrog other technologies, McEuen added.

Although Gigabit Ethernet was not originally designed with the reliability needed by carrier networks, enhancements now being developed by several equipment vendors should make it more attractive to service providers. Start-ups, as well as established vendors including Cisco Systems Inc., are working on features that would bring carrier-class reliability and predictability to Gigabit Ethernet-based services. Some vendors already have trials of carrier-class Gigabit Ethernet under way with service providers, and full-scale rollouts of these types of systems may come within a year, McEuen said.

Meanwhile, a working group of the Institute of Electrical and Electronics Engineers (IEEE), which governs the Ethernet standard, is working on standardizing Resilient Packet Ring, a set of these enhancements that are being adopted by some equipment vendors.

Pioneer, in Boston, can be reached at

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