Thus, Service Providers??™ economic models, over the next few years, will gravitate
toward aggressively reducing their cost structures, while being able to deliver the next
generation of packet-based applications. Competition and strategic positioning will
likely make Carrier Ethernet the most attractive choice, especially as the latter matures,
and incorporates and standardizes new features commercially.
As the quest for improved economics will drive Service Providers towards Carrier
Ethernet, this resulting demand will further improve the economics (of Carrier
Ethernet, due to both the scope and scale of increased deployment). Service Provider
economics and demand for Carrier Ethernet services therefore form a powerful, reinforcing
loop.
Fiber Deployment According to a recent study by AMI partners, Small and Medium
Businesses despite moving relatively slow, will spend over $30 Billion in 2007 in the
U.S. alone for (converged and unified) IP communications and other managed services,
and this is expected to grow at a CAGR of over 15% until 2010. Given this substantial
opportunity, Service Providers, especially the Cable MSOs (for whom this is a relatively
new market opportunity while for traditional Service Providers this remains a profitable
segment) are sure to pursue this vigorously.
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