There may be no hotter data service right now than Ethernet.

The worldwide market for Ethernet services was $2.5 billion in 2004 and is expected to more than double in 2005, according to Infonetics Research. From there, Ethernet service revenue is expected to jump another 276% between 2005 and 2009 to $22.2 billion, Infonetics says.

IDC says the market will grow from $3 billion in 2003 to $19 billion in 2007, a compound annual rate of 59%.

Many billows are stoking this fire.

On the end-user side, many companies are hungry for more bandwidth and looking to reduce their WAN costs. Ethernet offers a way to do both due to its bandwidth capacities and relatively inexpensive prices per bit.

For twice the price of a frame relay T-1 - about $400 to $500 per month - users get 7 times the bandwidth from a 10M bit/sec Ethernet pipe. And for the same monthly price as a $5,000 DS-3 ATM circuit, users get twice the bandwidth from 100M bit/sec Ethernet.

On the service provider side, carriers are also looking for ways to connect their various sites with higher bandwidths at cheaper price per bit, and Gigabit Ethernet point-to-point wholesale services meet this demand. And on the equipment side, recent carrier-class improvements have been made to Ethernet products that are enabling service providers to offer new Ethernet services, including those with quality of service and service-level agreements - usually the chief selling points of the traditional private line, frame relay and ATM services they are now beginning to replace.

Indeed, the top five sources of Ethernet service ports based on enterprise customer installations are, according to Vertical Systems Group:

•  T-1 Internet access is the leading source of Ethernet ports due to ease of service migration coupled with demand for higher speed connections to the public Internet.

•  Bandwidth-hungry new or "Greenfield" applications.

•  Migration from ATM ports at rates of T-3 and above.

•  Migration from site-to-site dedicated IP VPNs.

•  Conversions of T-1 frame relay ports.

Combined, these five sources represent 77% of the U.S. Ethernet port base in 2004, according to Vertical.