Frame Relay suffers as IP VPNs and more move on up

Out go ATM, Frame Relay and leased lines. In come DSL, Ethernet and IP virtual private networks (VPNs).

It may not be quite that simple but the world of data communications is in the midst of seeing some standards triumph at the expense of others, according to the latest research.

Cambridge-based Analysys has identified virtual private network technology that makes use of Internet Protocol - IP VPNs - as a big winner this year, bringing in 40 per cent more revenue for providers than last year.

At the top of the technologies labelled as 'in decline' is Frame Relay, which will generate 26 per cent less revenue than in the earlier 12-month period.

However, the shifts are clearly not just a case of straightforward substitution - the overall market is growing, at 4 per cent per annum from €23bn in Europe in 2003 to €28bn in 2008, says the consultancy.

Margaret Hopkins, who led the latest research, attributes the shift to users wanting enterprise-wide connectivity to IP-based applications, higher volumes of email and the integration voice and data applications.

She added that the change over in technologies will vary according to sector and country. The research was conducted in France, Germany, Italy, Sweden and the UK.