Wired Data Services Continue Expansion

Wireless networking gets all the hype, but you still have to run wires somewhere along the network to go wireless, and spending on wireline data services will continue to grow and expand, according to new research from In-Stat.

In-Stat found that multiprotocol label switching (MPLS), a mechanism in high-performance telecommunications networks that directs and carries data from one network node to the next with the help of labels, is growing in popularity. The research firm predicts spending on MPLS technologies will reach $2.4 billion by 2015. In 2010, MPLS sales were $985 million.

"MPLS is protocol agnostic and highly scalable," says Greg Potter, analyst with In-Stat. "It was designed to provide a unified data-carrying service for both circuit-based clients and packet-switching clients."

There have been other attempts at creating a technology that is protocol-agnostic and able to move across multiple networks, like frame relay and Asynchronous Transfer Mode (ATM). ATM is thought to have too much overhead, while Frame Relay uses too much bandwidth.

So it's not surprising the report finds Frame Relay spending will decline 55% from 2010 levels by 2015. Spending on cable data services, however, will increase 34% as cable providers increase their Internet services.

The overall growth in spending is primarily attributable to the growth in the number of businesses and physical locations. Much of this growth is in the small business market.

Small businesses (between 20 and 100 employees) are expected to spend a little more than $6.2 billion in 2012 alone as they increase their IT infrastructure to enjoy services usually reserved for large-scale enterprises.

The two fastest growing verticals will be healthcare and social services.