Monday, August 10, 2009

Ethernet Takes Over, Mbps Prices Fall

The ongoing economic downturn is fostering a changing of the guard in telecommunications services. What might look like a business depression is actually providing fertile ground for a shift in technology. It’s traditional TDM switched circuits out. IP based Ethernet connections in.

What’s driving this change? Oddly enough, it’s the high cost of doing business. While some companies are hunkering down, cutting staff and freezing budgets, others are actively looking for opportunities to get the same or better network services for less money. As their 1, 2 and 3 year contracts run out, these companies are using telecom brokerage services to survey the marketplace and gather competitive quotes. Only this time they are looking beyond just price quotes on their existing services. They’re also considering newer technologies that weren’t available during the last quote cycle.

Two powerhouse technologies are MPLS networks and Metro Ethernet services. These are related, in that they both represent a move from channel based switch circuit TDM networks that have dominated the telephone networks of the world for more than a century to IP core networks based on packets and traffic engineering.

MPLS networks are ideal for linking multiple locations in a many-to-many relationship. They can transport virtually any protocol. You can gain access with a T1 line, DS3 or SONET fiber optic service.

Metro Ethernet and its long haul equivalent, Carrier Ethernet, are LAN extension technologies. They allow companies to provided level 2 switched network connections or level 3 routed connections, as desired. E-Line service gives you the equivalent of point to point connectivity. E-LAN merges multiple locations on a single wide area network.

But Ethernet has another reason to be growing by leaps and bounds while traditional telecom services tread water. It’s cost. Ethernet is currently reported to provide a 20 to 30% cost reduction over frame relay or private line services. On higher bandwidth services that savings might grow as high as 50% or even more.

How is this possible? The quick answer is new competitive carriers with all new IP based fiber optic networks. Traditional pricing doesn’t stand much of a chance when aggressive competition comes to town and shakes up the sleepy old incumbent providers.

There are also new technologies available that can give you Ethernet connectivity up to the equivalent of a DS3 connection, 45 Mbps, over multiple pair of ordinary copper twisted pair. EoC or Ethernet over Copper enables companies to switch to Ethernet even if the cost of a fiber build-out is prohibitive.

Will Ethernet services be a better deal for your company? There’s only one way to find out. Check Ethernet prices and availability, including buildings already lit for fiber connections, right now. You may find yourself paying less and getting more. Isn’t that the best way to survive a recession?

Click to check pricing and features or get support from a Telarus product specialist.

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