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American Businesses Wiring up to Broadband

By Rick Laezman | Dec 15, 2010
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You’re reading an older article from ELECTRICAL CONTRACTOR. Some content, such as code-related information, may be outdated. Find the most up-to-date content at ECmag.com/magazine/articles.

With the cornucopia of wireless technology products consumers enjoy today, it’s almost hard to remember that, only a few years ago, much of it was only a pipe dream. Then, wired broadband was still the rage.

On the other hand, recent trends in spending by American businesses show that, despite the wireless growth, the older technology is in no danger of becoming obsolete. Even in a down economy, American businesses still know the value of investing, and when it comes to technology, wired broadband is on the rise.

According to the Scottsdale, Ariz.-based market research firm In-Stat, U.S. business spending for wired broadband data grew by 2 percent in 2009. A rapid growth in the number of business locations across the country combined with rising demand for services triggered this spending pattern.

In its study, “U.S. Business Spending by Size of Business and Vertical, 2009–2014: Wireline Data Services,” In-Stat looked at spending for various industries and business sizes and the different types of wireline data services they are choosing.

Regarding spending by industry, the study found that the education sector is responsible for the highest gains. Other growth sectors included healthcare and social services, which spent $5.5 billion on wireline data last year. The study found the construction industry spent the least.

The study also looked at the spending patterns of businesses broken down by size. It projects small-business spending to grow at a greater rate over the next five years than any other size business.

Finally, the study looked at the types of networks industries are installing. Ethernet emerged as the clear favorite, as opposed to ATM, frame relay, cable/DSL, VPN, TZ and others. According to In-Stat, business locations are demanding more bandwidth than in previous years, and the price-per-megabit of Ethernet services make it an attractive proposition when compared to its competitors. Secondly, service providers are phasing out ATM and frame-relay services in favor of other services.

The In-Stat study projects the trend will continue, with, for example, frame-relay spending forecasted to shrink 57 percent and Ethernet spending to exceed $18 billion by the year 2014. It projects retail and trade to spend more than $3 billion on Ethernet services in 2012.

About The Author

LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected]

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