Gigabit Ethernet switches drive more-for-less trend

Gigabit Ethernet switches drive more-for-less trend

As Gigabit Ethernet pricing continues to free-fall, the technology is finding its way into corporate networks where 10M bit/sec hubs once might have served small workgroups.

Recent products from vendors such as D-Link Systems, Linksys Group, Netgear and SMC Networks continue to push the more-for-less trend in network switches. Two engines drive this trend: increasing demand for faster LAN links; and smaller, more efficient LAN switch components from network silicon makers.

Since 1999, Gigabit Ethernet pricing has dropped from the $US1100-per-port price range to an industry average price of about $US400 per port. This estimate includes copper-based fixed-configuration Layer 2 Gigabit boxes and high-end fiber-based Gigabit ports with advanced features.

The push toward Gigabit Ethernet to the desktop is driven somewhat by new applications, such as streaming media and IP telephony. Demand also comes from specialized or vertical markets with end users who work with large files or use specialized applications that utilize lots of bandwidth.

According to an IDG survey of 500 IT executives, almost two-thirds of the respondents said Gigabit Ethernet was already in their networks, while another 30 per cent said it would be in the next two years.

Gigabit network interface cards and integrated 1000Base-T ports have become essential items for most server vendors. And recently, major PC manufacturers - including Apple Computer, Dell, Gateway and HP - have started offering point products or whole lines of PCs with integrated Gigabit Ethernet interfaces built into the motherboard.

Although smaller players have entered the Gigabit Ethernet market aggressively, this segment is still very much a Cisco world.

Cisco Systems owned 60 per cent of the 7.4 million Gigabit ports shipped in 2002. And 3Com and D-Link came in second and third with 7 per cent and 6 per cent of the market, respectively.

While 3Com has made a recent push to appeal to Cisco's customer base of large corporations, D-Link remains focused on smaller shops and the consumer market.

Observers say the appeal of D-Link Gigabit products to the masses is a sign of commoditisation in the Gigabit LAN switch market.

Part of this move to lower-cost products comes from more efficient design and component fabrication techniques from companies that enterprise customers usually don't deal with directly.

Many key components in copper-based Gigabit Ethernet switches are now one-third the size they were when the technology was introduced in 2000.

This lets more physical ports be packed together tighter, making the overall products less expensive.

Copper-based Gigabit switches also run much cooler now, which helps keeps pricing down for two reasons. Going from 5 watts of power down to 750 milliwatts - common for today's components - means less-expensive power supplies are necessary. Plus, with less heat, fans can be shrunken or removed - another factor leading to a smaller price tag.

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