Racing towards 10Gigabit Ethernet

Racing towards 10Gigabit Ethernet

As the price per port drops, enterprises are slowly adopting the technology. But it wil become really affordable a year from now

A university data centre may not seem the place to adopt leading edge technology, given that publicly-funded institutes are chronically short of money.

But as Andrew McAusland, associate vice-president of instructional and IT services at Canada's Concordia University points out, universities have unique clients.

Every year some 12,000 new students and their new technology - laptops with faster wireless accessing high-bandwidth social networking applications, for example - demand online satisfaction. Which is why six months ago, McAusland started experimenting with 10 Gigabit Ethernet. Not a wholesale rip and replace, but in select spots-between some servers in the gateway, in places where there are large file transfers.

"We like to take things for a test drive first," he chuckles.

But after several months, here's his verdict: "I am not convinced there is a return on investment for us" for the time being and is not now expanding its use. For the time being, he feels his budget is better spent improving services on the infrastructure he's got.

So if not now, five years after the IEEE approved the first of the 10GbE standards, when 10GbE become mainstream?

Soon, according to industry analysts.

The price per port is dropping, although not as fast as 1GbE did when it was introduced. But it is coming down.

In the second quarter of last year a 10GbE fibre port cost US$2,800, according to Gartner. In the third quarter it was US$2,600 a port and three months later it was US$2,300. That's about a 10 per cent a quarter drop. Historically, Ethernet port prices dropped 35 per cent year over year when the technology became a commodity.

According to Mark Fabbi, Gartner vice-president of research who specializes in enterprise network infrastructure, there's also a crude rule of thumb that the point an Ethernet technology reached its peak was when trippling the price of a port boughts 10 times the bandwidth.

During 2007, a fibre 1GbE port cost about US$300, so by that measure today 10GbE costs almost eight times as much. Which explains why in the fourth quarter of last year of the 75 million Ethernet ports sold into the enterprise worldwide, according to Gartner, only 150,000 were 10GbE ports - or about two-tenths of one per cent.

Another way of looking at it is that of the US$4 billion spent by enterprises on Ethernet ports last year, only US$341 million was on 10GbE ports, about eight per cent of the spend. Obviously IT buyers still see it as an expensive technology.

Veteran network equipment manufacturers such as Nortel Networks, Juniper Networks and Cisco Systems declare their customers are showing an increased interest in 10GbE, although some are shy about producing sales figures.

But they and starups like Blade Network Technologies (BNT), a Nortel spin-off that specializes in making Ethernet switches for blade server manufacturers such as IBM, Hewlett-Packard and NEC, are certain mainstream adoption is not far off.

"We bet a lot on 10G adoption of growing more and more rapdily," said Tim Shaughnessy, BNT's vice-president of marketing. Its first generation of products was released a year ago, and the second generation, with more ports and virtualization support, could be released this year. It also just released Smart Connect, software that allows network managers to configure multiple switches as a single device.

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