Reasons why your customers need Business Ethernet, now (part 1)

Ringing in the New Year is a chance to make changes, personally and professionally. So why not start 2018 by embracing new opportunities? Over the next couple of weeks, I plan to highlight seven compelling reasons why integrating business Ethernet services into your portfolio could be a lucrative new opportunity. If you haven’t considered business Ethernet yet, perhaps now’s the time...

A recent report from industry analyst Ovum shows that MPLS-based IP-VPN services are entering a period in which revenues will peak, and then level off (IP VPN Forecast: 2017–23, Sept 2017). The reasoning behind the prediction is that hybrid WAN solutions made possible by SD-WAN technologies will temper the growth seen in the last decade.

So if the opportunities to increase revenues are so limited in the MPLS space, how can service providers adapt their business strategy and achieve their growth objectives?

For a start, consider adding Ethernet services for high-capacity services, from 1GbE to 10GbE and 100GbE and beyond, to offer a differentiated and competitive service to your corporate customers. Not only will it add a cost-effective alternative to MPLS based services, it will also ensure your business Ethernet offerings are set up to offer SD-WAN and hybrid network services.

With next-generation business Ethernet services in your arsenal you can tap into this market to provide a complete end-to-end connectivity solution; and your enterprise customers benefit from an integrated network, the ability to embrace new connectivity strategies, and ways to simplify their architecture for greater predictability and control. Research shows that this is a great strategy, not least because the market for high-bandwidth business connectivity is huge, and growing – in fact Ovum forecasts that the enterprise Ethernet services market will grow at 10.7% CAGR, exceeding $70bn by 2020 (Ovum’s Ethernet Services Forecast).

Reason 1: The business Ethernet market is growing fast

The commoditisation of voice and data services and fiercely price-conscious business subscribers will no-doubt play a role in limiting revenue opportunities. This means that service providers increasingly need to look elsewhere to grow their customer base, open new revenue streams and boost margins.

If that’s the case for your organisation, you should consider entering this thriving market for high-bandwidth business connectivity. According to Ovum, Ethernet is now the de facto WAN data connectivity technology. Driven by enterprise’s enthusiasm for higher bandwidth services, Ethernet will be a very major portion of the data service market, and this growth will continue as we adopt ever more cloud-based applications and enterprises embrace digital transformation.

Reason 2: Bandwidth-hungry customers are everywhere

With applications and data volumes exploding in organisations of all types and sizes, there is an increasing need for 1GbE+ connections, with 10GbE+ connectivity for HQ, and even 100GbE+ connections for data centre connectivity. The only way for these numbers is up – providing major opportunities for service providers who are able to integrate business Ethernet services into their portfolios.

Specifically, demand is being driven by the proliferation of bandwidth-hungry applications. An MRI scan, for example, can be a 300GB file, which would take around 7 hours to download over a 100Mb connection. Over a 10GbE link, that time falls to just 4 minutes, and to 28 seconds on a 100GbE link – this can be the difference between life and death when a consultant needs to make a time critical decision on how to best treat their patient.

Watch this space

I hope I have you thinking about the prospect of enabling high-capacity business Ethernet services. I’ll post again soon with more compelling reasons to make the move. Our customers are already implementing business Ethernet services for their enterprise customers. Find out more here.

If you have any questions about the opportunities of business Ethernet in the meantime, or if you’d like to talk about how to start delivering these services to corporate customers, please contact me through LinkedIn.