Price-Performance Of 10-GBIT Entices Enterprises To Switch

"We're starting to see in more of the core upgrades that it is going to be the technology of choice," said John Freres, president of Meridian IT Solutions, a solution provider in Schaumburg, Ill., who expects his sales of 10-Gbit switches to grow 20 percent to 30 percent in 2004.

The high-capacity switches, used most commonly by service providers, support more bandwidth than many enterprise customers currently require, solution providers say. However, they add, as those enterprises look to future-proof their infrastructure, more are paying attention to 10-Gbit technology.

Price reductions and improved technology have opened 10-Gbit sales opportunities to enterprise, education and government customers.

Major IT expenditures commonly require approval by a company's board of directors, which closely scrutinizes the long-term scalability of technology investments, Freres said.

For example, one large education customer wants the technology it buys today to have a life span of up to 10 years, he said.

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While customers look to the future, they are also purchasing technology that makes a strong case for 10-Gbit switches in the network core, industry observers say.

"With Gbit at the edge, multi-Gig at the core is required," said Bert McComas, founder and principal at InQuest Market Research. "Two years ago, it was easy to tout it as vaporware, but from this point forward, all data-center infrastructure decisions must consider 10-Gig."

The increasing use of high-bandwidth technology such as SANs and voice-and video-over-IP also is prompting customers to seriously consider 10-Gbit switches, solution providers say.

And the dropping price of the technology is helping to make those considerations even easier, said Bob Beliles, product marketing manager at Cisco Systems, San Jose, Calif.

The first generation of Cisco's 10-Gbit switches cost $60,000 per port,a price tag that has since dropped to about $8,000 per port, Beliles said.

Such drastic price reductions have opened sales opportunities to not only customers with high-performance requirements but also the general population of enterprise, education and government customers, he said, a sentiment echoed by solution providers.

"It's like the PC market, where you can buy a new PC today and spend the same as you did five years ago but get 50 times the capacity," said Michael Kennedy, managing partner at Network Strategy Partners, a network consulting firm in Concord, Mass.

Synergy Research Group expects the 10-Gbit Ethernet switch market to grow to $366 million in 2004, up 250 percent from $103 million in 2003.

In addition to declining prices and growing bandwidth usage, customers will be more apt to purchase 10-Gbit switches because of improvements in the technology itself, said Joshua Johnson, industry analyst at Synergy.

For example, Extreme Networks recently launched a nonblocking 10-Gbit core LAN switch, which can pass data through at wire speed.

Extreme's BlackDiamond 10K offers a performance boost over the vendor's previous 10-Gbit offerings, which only physically passed 8 Gbits of data per second through the chassis.

The BlackDiamond 10K also includes ExtremeWare XOS, a new Unix-based platform that allows users to perform software upgrades without taking down the switch, said Duncan Potter, vice president of marketing at Extreme, Santa Clara, Calif.

The eight-slot chassis supports six 10-Gbit ports or 60-Gbit ports per blade for a total of 48 10-Gbit or 480-Gbit ports. It is available now with 10-Gbit pricing of $7,200 per port.