Infrastructure
News
10/31/2003
01:44 PM
Connect Directly
RSS
E-Mail
50%
50%

TechGuide: Every Little Gigabit Helps

Cost trends, more than application needs such as voice over IP, will help drive mainstream and enterprise acceptance of Gigabit Ethernet.

The spread isn't happening for bandwidth reasons, though, Meta Group analyst Chris Kozup says. Large companies already have "more bandwidth than is needed for the average corporate application," he says. But he notes that in some respects, this has been true since the original 10Base-T Ethernet shifted from shared to switched, which didn't stop Fast Ethernet from grabbing 50% of the typical enterprise connectivity environment. Even so, Meta Group says that more than a quarter of installed LAN equipment continues to be some variety of the hoary 10 Mbps standard, while token ring and asynchronous transfer mode make up another 8%. All of that equipment, when upgraded, will likely move to Gigabit Ethernet, not because of bandwidth needs, but because of cost trends.

Companies will also make the move to get more types of services built into their switches. Large companies increasingly expect to see switches come with services such as wireless networking, security (particularly firewalls and intrusion-detection systems), distributed storage, and high-level network management (for more on wireless, see sidebar: Not Quite A Wi-Fi Ethernet World). Those services will drive upgrades to new networking equipment, particularly on the backbone. The switch of choice will shift to Gigabit Ethernet in the next few years, particularly as costs continue to come down. In fact, the market is already shifting away from an emphasis on speed.

"Speed only gets you so far," says Zeus Kerravala, a Yankee Group analyst. "There's not a lot that differentiates a Foundry [Networks] switch from a fast Foundry switch from a fast Extreme [Networks] switch." Kerravala says growth in the gigabit Ethernet market, and the market overall, will come from built-in features.

A look, then, at the future of the corporate network:

Fast Ethernet
Fast Ethernet, or 100Base-T, is a mature standard, but it certainly isn't going to disappear. While revenue for Fast Ethernet equipment will drop from $6.2 billion in 2002 to $5 billion in 2005, port shipments will zoom up to 155 million in 2005, according to Yankee Group. Much of that volume will come from developing nations, and also from new arenas for the technology as it gets ever cheaper. Fast Ethernet sales in the United States and other industrialized nations will begin to decline in the 2004-2005 timeframe, as the cost of Gigabit Ethernet becomes comparable. Some worldwide usage trends will help push Gigabit Ethernet volumes higher; in Japan and South Korea, for instance, consumer PCs often come with Gigabit Ethernet built in (that's nosebleed territory in the United States, which has a relatively constrained consumer market for increased bandwidth).

Faster Ethernet (The Shift To Gigabit)
Indeed, prices for Gigabit Ethernet will keep falling. A Gigabit Ethernet switch still sells for about 50% more than its Fast Ethernet counterpart, but by mid- to late 2004, the gap will be around 25%, and that makes Gigabit Ethernet worth a hard look when businesses finish the depreciation cycle for older switching equipment and are looking to upgrade. In some cases, the cost of a switch with Gigabit Ethernet ports is only 10% to 20% higher than the cost of one with Fast Ethernet. But again, companies aren't moving to Gigabit Ethernet for the speed, at least not on the desktop.

Customers are moving because cards are cheap, for starters. Sure, even ordinary desktop users in a corporate environment occasionally see spikes where they're pumping 150 Mbps through the network, which is faster than Fast Ethernet can support. But even power users in the average company rarely exceed 250 Mbps. So while Gigabit Ethernet can boost performance for heavy-duty users, it isn't going to speed up PDFs and PowerPoint presentations all that much.

Previous
2 of 4
Next
Comment  | 
Print  | 
More Insights
2014 Next-Gen WAN Survey
2014 Next-Gen WAN Survey
While 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - August 27, 2014
Who wins in cloud price wars? Short answer: not IT. Enterprises don't want bare-bones IaaS. Providers must focus on support, not undercutting rivals.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Howard Marks talks about steps to take in choosing the right cloud storage solutions for your IT problems
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.