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The Business Case for Ethernet Services for Mid-Sized Businesses

Abstract

Network-based applications such as Voice over IP (VoIP), cloud computing, collaboration services and video applications of all kinds are driving the need for high-speed, high-quality and reliable networks that exceed the capabilities of the services many businesses are using today.

Bandwidth requirements are forcing growing businesses to rethink their networking solutions. For example, ACG Research estimates that mid-sized business sites will require 25 Mbps to 85 Mbps of bandwidth over the next three years. TDM-based access networks in use today are poorly positioned to meet these emerging network service needs. They do not scale easily to meet higher bandwidth requirements, and quality guarantees and resiliency features must be added via a switching or routing overlay.

Ethernet services provide industry-standard solutions to meet the emerging network requirements faced by mid-sized businesses. Ethernet services scale from 1 Mbps to 10 Gbps and beyond and have built-in quality and resiliency features that are compliant with industry-standard Carrier Ethernet specifications. When combined with an Ethernet LAN, Ethernet services provide an end-to-end Native Ethernet solution. This makes Ethernet services easier to install, operate and maintain than TDM-based access service alternatives. Furthermore, compared to TDM solutions, end-to-end Ethernet solutions offer significant savings in monthly recurring charges.

An analysis of scaling economics of Ethernet and TDM/SONET access services shows that Ethernet solutions are available at many bandwidth speeds with gradually increasing prices. For typical mid-sized businesses, ACG Research compared the monthly recurring costs of Ethernet versus TDM access for point-to-point, point-to-multipoint, and multipoint-to-multipoint network configurations. ACG Research found that Ethernet services have 44 percent to 81 percent lower costs than TDM-based alternatives.

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