Infonetics Research says that demand for cloud services and an overall increase in data traffic will boost the market for Ethernet and IP MPLS virtual private network (VPN) services to beyond $81 billion by 2016. The market research firm makes the prediction in its newly released 2012 Ethernet and IP MPLS VPN Services report.

Ethernet and MPLS IP VPN service revenue worldwide grew a combined 13% in 2011 to just over $50 billion, Infonetics says. This growth rate was significantly greater than that of telecom service provider revenue (though actual service provider revenue is increasing). More than 90% of spending on mobile backhaul equipment in 2011 was on IP/Ethernet gear, the company adds.

"The move from legacy frame relay, ATM, and leased-line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today's highly interconnected, mobile, video- and cloud-oriented world," notes Michael Howard, co-founder and principal analyst of Infonetics Research. "By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer."

Asia Pacific will surpass EMEA as the leading region for IP MPLS VPN services this year; it already leads in Ethernet services. Asia will remain the leader for the combined IP MPLS VPN and Ethernet services market going forward as well, led by China and India, according to the report.

Infonetics' Ethernet and IP MPLS VPN Services report provides market size, forecasts through 2016, and market and trends analysis for wholesale and retail Ethernet services (Internet and WAN access, E-LINE, E-LAN services) by speed, and managed and unmanaged Layer 2 and Layer 3 IP MPLS VPN services.