Use of IP VPNs, carrier Ethernet to rise, survey says

Most ATM, frame relay users plan switch of some sites within 2 years

While many enterprises are still using legacy technologies, such as ATM and frame relay, most plan on modernizing at least some of their locations within the next two years, according to a Current Analysis survey.

The survey, which was conducted among roughly 120 decision-makers directly involved in selecting enterprise WAN services, found 44 percent of enterprises used frame relay, while 25 percent used ATM. Among frame-relay users, 75 percent said that they planned on switching to IP VPNs within the next two years, while 46 percent said they planned on switching to carrier Ethernet within the next two years.

Meanwhile, 80 percent of ATM users said they planned to switch to IP VPNs within the next two years, while 61 percent said they planned to switch to carrier Ethernet within the next two years.

"Incumbent service providers are challenged as more businesses demand IP and Ethernet services, yet many of their largest enterprise customers continue to operate on aging ATM and frame relay networks," says David Hold, a senior network systems analyst at Current. "However, our survey indicates that the majority of those legacy users are ready to make the move to next-gen services."

The survey found the major reasons companies are deciding to switch over to next-generation WANs are the need for higher bandwidth, lower costs and a desire for bundled voice, video and data services.

Overall, a majority of firms surveyed had already implemented next-generation WAN technology, as 68 percent reported using IP VPNs and 67 percent reported using carrier Ethernet.

The survey's sample tilted toward bigger enterprises, as roughly two-thirds of respondents were categorized as medium-to-large businesses, with 36 percent spending over US$10 million per year on telecom services, and 31 percent spending between US$1 million and US$10 million per year.

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Brad Reed

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