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12/2/2004
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Switches Drive Down Prices For 10-Gbps Ethernet

Lower prices and faster speeds may spur businesses to upgrade their networks.

Falling prices for 10-Gbps Ethernet switches may spur a new round of network upgrades by businesses looking to provide more speed for bandwidth-hungry applications. Hewlett-Packard and Alcatel today will introduce several aggressively priced 10-Gbps switches, joining a host of other major networking vendors' faster and cheaper switches introduced in recent months.

They're all taking aim at switching-market leader Cisco Systems, which last week introduced its retooled line of Catalyst Ethernet switches featuring new devices, additional 10-Gbit capabilities, improved availability, and better security.

Lower prices for faster switches may convince business-technology managers that now is the time to upgrade their networks, many of which still operate at Ethernet (10 Mbps) or Fast Ethernet (100 Mbps) speeds. "This technology is becoming essential for businesses that are upgrading networks that are five or six years old," says Joel Conover, a principal analyst for enterprise infrastructure at research firm Current Analysis. "They've been waiting for this new generation of technology."

Many businesses have bought new desktop PCs and notebooks that have tri-mode connections that support 10/100/1,000 Mbps, but they haven't yet upgraded their networks to provide 1,000 Mbps--or 1 Gbps--to the desktop. By adding 10-Gbit switches to the edge or core of their networks, businesses will have enough horsepower to deploy faster speeds to the desktop.

More than 16,000 10-Gbps switch ports were sold worldwide in the third quarter at an average price $6,000 per port, says Seamus Crehan, a director at research firm the Dell'Oro Group. "We've seen strong growth in 10-Gbit, but it's coming off a small base," he says. "The dramatic price declines have helped that growth."

Cisco says businesses are now buying more 10/100/1,000-Mbps switching ports on its modular products than the 10/100-Mbps versions, creating a need for faster switches to aggregate and move that traffic around a company network. That means the market for 10-Gbit switches is poised to take off, says Jeanne Beliveau-Dunn, senior director of worldwide product and technology marketing for Cisco. "Two years ago, we were selling 100 10-Gbit ports a month," she says. "In the third quarter, we sold 12,500."

Cisco introduced 20 new devices, including Catalyst 6500 and 4500 supervisor engines and Catalyst 6500, 3750, and 3560 switches with power-over-Ethernet capabilities. It also introduced what it calls the industry's first Gigabit Ethernet-enabled IP phone, which permits gigabit speeds to the desktop over a single cable to serve both the IP phone and a PC.

Rival vendors are trying to grab share from Cisco, which still dominates the switching market. Cisco sold around two-thirds of the managed switch ports bought in the third quarter in North America, according to the Dell'Oro Group research firm.

Alcatel introduced the OmniSwitch 6800 line of Gigabit Ethernet switches, which feature 24 or 48 1-Gbps ports and can accommodate slide-in 10-Gbps modules. The switches include more redundancy to eliminate single points of failure, enhanced security capabilities to enforce user authentication and authorization and quarantine viruses and worms. A 48-port version loaded with a two-port 10-Gbit module costs around $24,000.

HP, which is trying to raise the visibility of its networking products by branding them with the name ProCurve Networking, introduced the 6400 line of 10-Gbit switches designed for the network core or key traffic-distribution points. HP is pushing a different network approach that calls for more intelligence at the network edge and simple, high-bandwidth devices at the network core. It offers 10-Gbps-over-copper modules for around $900 per port; fiber modules cost less than $5,400 per port.

Other switch vendors such as 3Com, Enterasys, Foundry Networks, and Nortel Networks have similar products on the market, and they're beginning to compete more aggressively on price.

Says analyst Conover: "The nice thing about these products is they let businesses build networks on gigabit speeds and then when they start outgrowing them, they can start buying the 10-Gig modules and add them in."

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