It’s no secret that service providers are constantly looking for ways to bring new and innovative services to market in order to stay competitive and meet revenue objectives. While there is no silver bullet when it comes to edging out the competition, companies are starting to realize the benefits of adding business Ethernet services to their repertoire of offerings, particularly to provide differentiated high-capacity services for corporate customers.
Below we’ll explore a few reasons why it’s time to invest in business Ethernet services – everything from meeting demands of your customers’ digital transformation to the ability to drive greater margins for your own organization.
Meeting the demands of niche markets
As technology continues to disrupt virtually every industry, there are more specialized use cases that require massive amounts of bandwidth and barely detectable latency. While there is an increasing need for 1G+ and 10G+ connections, 100G is no longer just a luxury to have for future use cases. Take the healthcare industry for example, where it is not an exaggeration to say latency can mean the difference in medical outcomes. An MRI scan 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 – meaning the best course of action can be determined faster, leading to quicker treatment decisions. In this case, while 100G may be overkill for many customers, a hospital can’t afford anything less.
While 100G applications are not yet applicable for your typical use case, there is a growing need for it, which will only continue to grow as more bandwidth-hungry applications are developed and implementations increase. From what we’ve seen, industry projections estimate that almost $7B (U.S.) worth of 100G Ethernet services will sell this year and will approach $20B by 2020.
Creating opportunities beyond basic connectivity
While meeting bandwidth requirements will always be a priority and the main driver of revenue, business Ethernet services also provide the ability to offer software-defined wide area networking (SD-WAN) and virtualized network functions (VNFs). SD-WAN is a $6 billion market opportunity according to Lee Doyle of Doyle Research. As he explains, SD-WAN has many benefits, such as:
- creating and automating setups of site-to-site VPNs
- using lower-priced broadband access links
- providing centralized management and control
- dynamically scaling bandwidth
Another benefit of high-bandwidth WAN connectivity is supporting cloud-based services. There is no arguing how fast cloud implementations are growing, and it’s something that is here to stay.
If you thought $6 billion sounded like a lot, IHS-Markit said carrier NFV spending will be at $37 billion in 2021. Where will this revenue come from? The breakdown looks like this: “In 2021, 49 percent of the NFV revenue will be new revenue from software and outsourced services, and 8 percent will be displaced revenue spent on NFVI server/storage/switch hardware purchased instead of purpose-built network appliances. The remaining 43 percent represent spend on VNF software.”
Security – always a top priority (and rightfully so)
Security considerations are a boardroom-level discussion and continue to be top of mind for executives at virtually every organization. Any new project or technology implementation must be scrutinized to ensure it doesn’t open the company up to any security vulnerabilities, as well as ensures it meets any applicable regulations such as the European General Data Protection Regulation (GDPR).
So how does business Ethernet fit into all this? Ethernet makes it possible to determine the exact path that customers’ traffic will take between network endpoints. Customers have more insight into where data has been, and where it is going, giving them unprecedented ability to show they are compliant with regulations and that the data is safe. Data determination can generate additional revenue from current customers, or attract new customers looking for this greater level of insight that not everyone can provide.
Standing out from the crowd
The biggest benefit from business Ethernet services is the ability to demonstrate clearly why your offerings are different, a necessity in today’s competitive landscape. The tricky part –not everyone’s wish list of priorities is the same. Whether it’s having the ability to agree to a particular SLA or scale with a customer (Ethernet requires no site visits or staffing requirements) – it is important to have the flexibility and capability to meet customers’ needs. With business Ethernet services, current customers have a reason to stay and potential customers have no reason to keep looking.
