- Evolved entrants: Not long after CENX made its debut, traditional colocation and voice tandem providers such as Equinix (Nasdaq: EQIX), Neutral Tandem and Telx have also added Ethernet exchange service to their service portfolio. Seeing a potential global opportunity, Neutral Tandem expanded its fortunes by acquiring TiNET--a move that instantly gave the voice tandem services company international presence with established NNI agreements in place.
Despite the promise that the Ethernet exchange can bring to the Ethernet buying/selling market, it has a long way to go until it's a mainstream concept.
Right now, the dominant interest in joining the Ethernet exchange has come from competitive service providers like Cox Business, MegaPath and XO Communications (OTC BB: XOHO.OB). That's not to say that incumbents aren't interested in Ethernet exchanges, however. Already well connected incumbent service providers like China Telecom and even Verizon (NYSE: VZ) have joined CENX, for instance.
Of course, the other question is what about AT&T (NYSE: T)? Thus far, Ma Bell has remained mum on whether or not it will join an Ethernet exchange, although it continues to expand its Ethernet presence domestically and globally through established E-NNIs.
And while Vertical Systems Group forecasts the Ethernet exchange market will be worth US$674 million in 2014, Rosemary Cochran, principal of the analyst firm, is quick to add that it will take a few more years for Ethernet exchanges to expand worldwide and the business model to stabilize.
"The providers we've talked to in our survey all over the world are split--half of them say, 'yes, we're going to use it in the next two years,' and about half of them say, 'we're not sure,'" she said.
What's significant about it?: Admittedly, the Ethernet exchange market is still very much a Wild Wild West with a host of new players, but for service providers that are looking for another way to expand their off-net Ethernet reach the Ethernet exchange will be another tool in the veritable toolbox to streamline the Ethernet interconnection process.
