The market for Ethernet services continues to grow, and in turn so does the market for Ethernet technology. Equipment vendors are adding more Ethernet functionality to their gear and advancing the capabilities of existing Ethernet technologies.

In September, chip-maker Lightstorm Networks unveiled what it called a carrier Ethernet switch-on-a-chip, promising to help accelerate cost declines in carrier Ethernet gear.

In the last two months of 2007, Hammerhead Systems and Nortel Networks both introduced new products that elevate one carrier Ethernet transport technology, provider backbone transport (PBT), from a point-to-point technology to a point-to-multipoint one as well. That step, meant to allow carriers to use PBT in IPTV delivery and other multicast applications, addresses one of the chief criticisms of PBT since it came on the scene in mid-2006.

And early this year, word got around of an important new development in the market for packet optical networking gear — systems that help carriers migrate from legacy to packet-based (usually Ethernet) networks, using integrated optical multiplexing as a third leg on which to balance. Analysts believe Fujitsu Network Communications won a deal to supply Verizon with its new packet optical offering, the Flashwave 9500, beating out Alcatel-Lucent and Nortel for the contract. Meanwhile, other packet-optical players, such as Ciena and Tellabs, are adding ever more Ethernet functionality to their gear.