Research Director, European Tech Solutions and Ecosystems IDC
What Is the Role of Ethernet in a Digital-Native Network?
At a recent roundtable discussion that I moderated on behalf of Vodafone Business and Ciena, IT and network executives highlighted scalability as a key aspect that enterprises seek in networking solutions. This should not be a surprise, given the explosion in network requirements that we have seen in recent years, and which is set to continue in the coming years. At IDC we forecast that fixed data volumes among U.K. business, for example, will grow by more than 20% a year to 2023. This underscores why we have identified scalability as one of the key attributes of our digital-native network concept, along with flexibility, manageability, cost effectiveness, and security. While the need for these attributes is generally consistent across organizations, the requirements of individual sites or scenarios typically are not.
This is where the hybrid network architecture comes into play. As a key element of a digital-native network, it enables organizations to optimize cost and performance for every location by combining public and private connectivity. Often under the radar of connectivity debates, Ethernet services are an important component of many hybrid networks. Typically selected for reasons such as very high bandwidth, low latency, and ease of implementation, Ethernet services accounted for almost 30% of U.K. enterprise spending on fixed data connectivity in 2018 (end-user organizations with 10 or more employees; Ethernet includes optical services). This proportion will increase slowly but steadily in the years to come.
Ethernet services break down into switched and dedicated flavors, which are different in terms of bandwidth, protocols, topology, and route determinism. Switched services usually address more generic WAN purposes serving sites and datacenters, typically with speeds up to 10Gbps. Dedicated Ethernet, including optical services, provides deterministic routing, very low latency, and very high bandwidth (up to 100Gbps). These characteristics position it particularly well for cloud and datacenter scenarios, like connectivity between main company sites and datacenters, or datacenter interconnect. Use cases of this are found across many industries. Below are a few key examples, though this is by no means an exhaustive list.
In the health sector, the research of academic hospitals and collaboration between different facilities drive the exchange of sensitive, bandwidth-intensive information such as images, scans, and videos. This information increasingly needs to be stored centrally and accessed from multiple locations. In financial services, high-frequency trading is a very specific subsegment where ultra-low latency is critical, as each millisecond gained means additional profit opportunity. Broadcast and media organizations are seeing their bandwidth requirements accelerate as the amount and resolution of video increases, while at the same time the popularity of their online video services drives further capacity requirements. The same applies to over the top (OTT) content providers, which need to connect their datacenters and store content close to their users.
We see Ethernet as a key component of a hybrid network architecture, which is one of the core building blocks of a digital-native network. As such, Ethernet will be part of the foundation that can drive a company's digital transformation. You should avoid looking at Ethernet connectivity in isolation, however, and consider it in the context of your wider WAN transformation.
This article was written by International Data Corporation (IDC), a globally respected industry analyst organisation specialising in market intelligence and advisory services for information technology and telecommunications.
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