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Data Center Activities Accelerate Ethernet Test Equipment Market

Analysis from Frost & Sullivan shows that the explosion of network traffic in China is forcing network operators and network equipment manufacturers (NEMs) to search for higher-speed technologies to break the bandwidth limit. Higher-bandwidth applications have popularized 10GbE networks, while the 40/100GbE market is expected to grow considerably. With the rapid uptake of these networks, the Ethernet test equipment market is expected to exhibit double-digit growth rates through 2018.

The Chinese Ethernet test equipment market earned revenue of $109.5 million in 2011, and revenue is estimated to grow to $264.9 million in 2018, according to Frost & Sullivan.

The extra bandwidth created by the increased use of smart terminals and the widespread application of data/video/voice services is compelling service providers and NEMs to move toward Ethernet technology, which offers significant opportunities to test vendors.

Service providers and carriers are the biggest end-user groups in the 1GbE and 10GbE test equipment market, therefore, their cost consciousness affects the market for test equipment.

“Due to the increasing price-performance ratio of instruments, test equipment vendors are competing on price while offering the highest level of product performance,” said Frost & Sullivan Research analyst Wei Wei, in a company statement. “In addition, they offer specialized customer service and technical support to ensure quality of service.”

Test equipment vendors are constantly investing in R&D to keep pace with technological advancements. They will also gain from operators moving away from traditional time-division multiplexing (TDM)-based mobile backhaul networks to Ethernet mobile backhaul to scale and simplify provisioning and management.

“Additionally, the deployment of a 10G passive optical network for mobile backhaul traffic will boost the Ethernet test equipment market,” noted Wei, in a company release. “Telecom infrastructure upgrades enhance the need for testing and thereby, push up the sales of Ethernet test equipment.”