Ethernet Wide Area Networking (WAN), although described as one of the most exciting developments in corporate networks, has taken longer than expected to gain genuine acceptance in the enterprise market explains Martin Bishop, Head of Global WAN Services, Telstra International EMEA.

Of course, Ethernet has been ubiquitous in company Local Area Networks (LANs) for years, and the prospect of being able to extend this simple to use, cost effective technology over larger areas and between both regional and global offices has enormous potential.

For the past 3 years however, Ethernet WAN services have been at a crossroads. Enterprise take-up has been restricted, and end-user companies have faced a dilemma; does it really make sense to employ Ethernet WAN services, or should they stick with private circuits and MPLS based IP-VPN services?

There are certain areas that have made this dilemma even more acute. Without doubt, demand for cost effective, high bandwidth business connections over large geographical areas is ever-increasing. With the growing sophistication of services such as telepresence, the need to move larger encrypted files faster than ever, and the convergence of voice and data onto a single network, severe pressure has been placed on the bandwidth of enterprise data networks.

Additionally, at a time when capital and operating budgets are under constraints, enterprises have found it difficult to balance the need for increased infrastructure expenditure to ease this network congestion, with the need to reduce overall costs.

In many ways, Ethernet WAN could be the technology to relieve these concerns. With its support for higher bandwidths, and its ability to reduce total cost of ownership without additional infrastructure requirements, it has the promise to improve both the efficiency of a company’s network, and help the bottom line.

Ethernet offers granular speed options, which makes the technology both cost-efficient and scalable, with companies able to pay for what they need, whilst having the flexibility to increase bandwidth as business needs demand. On top of this, Ethernet could help to reduce running costs in comparison to other MPLS technologies that are widely used by enterprise? up to 20% on a like-for-like, per Mbit/s basis.

Despite all these clear advantages, why haven’t the Ethernet services offered up until now proved more successful? The idea of using Ethernet ‘point-to-point’ or ‘any-to any’ services across a shared infrastructure has left businesses, especially financial institutions, concerned about the implications of sending sensitive data over a shared IP infrastructure.

Secondly, and perhaps most importantly, the services have had severe limitations when it comes to scale, both in terms of the number of sites and geographical reach. The vast majority of Ethernet WAN options have been Metro services, restricted within one city. This has meant that companies have been able to enjoy the benefits of Ethernet WAN over small areas, but multinational corporations looking to connect branches and offices internationally have been left with extremely limited options.

Ovum recently forecast that the market for Ethernet WAN services is set to grow in value to US$31bn in 2012 from US$14bn in 2008, suggesting that more valuable Ethernet WAN services are now being offered to enterprises. This is no doubt partly thanks to security concerns being allayed, as enterprises have been assured that the availability, integrity and confidentiality of business-critical data over WANs is guaranteed.

Equally important however, the market is set to boom because the geographical reach of the services being offered has greatly expanded, opening up scope for connecting international offices thousands of miles from each other over Ethernet. In 2008, 71% of the entire Ethernet WAN market was comprised of Metro services, but the technology demonstrates its greatest potential over a truly international scale.

European companies looking to expand eastwards by opening up offices in the emerging markets of Asia for example, now have an increasing range of options. Thanks to Ethernet WAN, they are now able to connect offices globally, from Hong Kong, Malaysia, and Indonesia, to central offices in the UK or U.S.

It is crucial that service providers continue to expand the geographical range of Ethernet WAN services to further international locations such as these. If this trend continues, companies will finally be able to reap all the benefits of the LAN on truly global scale. Finally, after all its promise, Ethernet WAN may be about to come to fruition.