5/18/98 America's Network. Data's best-kept secret [Very bullish on frame relay]
americasnetwork.com
Annie Lindstrom
While asynchronous transfer mode (ATM) grabs the headlines, frame relay is quietly making a fortune for carriers. In 1992, industry analysts wondered if
there was a market for the service which, in 1991 had brought in only $2
million in revenue from 36 paying customers, according to Rosemary Cochran,
principal of Vertical Systems Group (Dedham, Mass.).
In five short years, frame relay has carved a $6.1 billion niche in the global data market (see figures), Cochran says. Worldwide, frame relay generated $3.9 billion in revenues last year. Today, more than 25,000 enterprises use the service. Frame relay will continue to prosper, she adds, noting that there will be more than 1 million billable ports in service by the end of 1999.
Although there has been much interest in Internet protocol (IP) and IP-based virtual private networks (VPNs), speculation that IP VPNs will replace frame relay is tempered by the huge installed base of frame relay lines and equipment.
"There are 425,000 sites using frame relay for remote access. That's a big
installed base," Cochran says.
In fact, it's quite likely that future VPNs will employ frame relay, rather than replace it. Additional hot opportunities for frame relay service providers include Internet access, managed services, and the transport of delay-sensitive traffic such as voice over frame relay (VOFR) and Systems Network Architecture (SNA).
"SNA over frame relay is the single largest untapped opportunity for frame relay service providers," Cochran says.
According to Sprint Business (Dallas), 50,000 companies currently use private line-based SNA for mission-critical back-office functions such as payroll, order
entry and inventory control.
At N+I, Sprint Business announced an agreement with IBM (Armonk, N.Y.), the developer of SNA, to provide an end-to-end solution which should help SNA customers migrate to frame relay with minimum risk. The solution will be available in the third quarter.
In addition, 14 Frame Relay Forum members demonstrated frame relay's ability to transport all types of traffic, including voice, video, data and imaging on a single link, as well as performance monitoring and service-level administration.
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