Enterprise End Users Moving To Next-Generation Networks
By David Hold and David Baltaxe
Published May 2007; Posted August 2007



Back around 1999–2000, pundits were already predicting the demise of frame relay and ATM network services. With IPVPN services coming on line, the next generation of connectionless services would usher in a new era of meshed networks by eliminating the need for expensive and rigid permanent virtual circuit (PVC) connections.

Not long after, Ethernet services held out the promise of cheap and plentiful bandwidth by simply extending local area networks across a metropolitan area. Then it was said that a combination of IP-VPNs provisioned over MPLS would provide the one-two punch that would all but eliminate the need for legacy frame relay and ATM services.

As it turned out, the pundits were half right; many of those enterprise network managers who had balked at using the public Internet for the corporate backbone were more willing to trust “private” MPLS-based IP-VPNs. And with the demand for bandwidth once again on the rise, Ethernet today ranks among the fastest growing data services.

Still, as recently as 2006, legacy data services were still generating as much or more revenue at some major carriers than were the next-generation services, and while the number of enterprises operating frame and ATM networks is declining, the holdouts represent the cream of the largest corporate and government customers.

Current trends suggest that the growth of IP and Ethernet, and the decline of frame relay and ATM, will inevitably reverse that revenue mix, but the question is, when? Has the time finally come when even the most conservative networkers are finally ready to replace those big ATM backbones?


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About the authors:

David Hold is senior analyst for network services at Current Analysis, where his coverage includes ATM, frame relay, MPLS and Ethernet services. David Baltaxe leads the customer intelligence practice at Current Analysis.


This article is reproduced by special arrangement with our partner, Business Communications Review.


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