10-Gbps Networking Will Be $3.3 B Industry By '09. Here's Why.

The march toward affordable 10-Gbps Ethernet is breaking into a run, according to a new report that predicts the average price for a port will be $2,800 in 2006 and $1,000 in 2009. Hewlett-Packard already is offering modules with copper 10-Gbps ports for around $900 and fiber 10-Gbps ports for around $1,350.

10-Gbps Ethernet networks multiply the speed and volume of data traversing a company. Recently, some vendors have softened earlier commitments to more-expensive fiber-optic 10-Gbps Ethernet networks in favor of those using a more common standard of copper cabling, says David Gross, a senior analyst with market researcher Communications Industry Researchers, who wrote the report.

Copper is less expensive than fiber, and it's more likely to be part of a company's existing physical infrastructure, but 10-Gbps over copper doesn't travel as far as fiber, which probably limits its usefulness to data centers. Most companies put off upgrading to 10-Gbps Ethernet when the technology only ran on fiber, Gross says. Many of those businesses will upgrade now that a cheaper alternative exists.

While 10-Gbps Ethernet's lower price will close sales, that doesn't mean it's coming to the desktop soon, Gross says in the report. Instead, it will enable companies to cluster data resources because larger chunks of data can be moved more rapidly at a reasonable cost.

Large database resources, once dispersed to minimize response time, will be grouped. Affordable 10-Gbps Ethernet makes moving from mainframes to clusters of Linux computers far more realistic, Gross says. Industries such as financial services will welcome the change. "Financial services are looking at their trading networks as another revenue stream," he says. "They will benefit from split-second transaction times at a reasonable price."

Purchases of 10-Gbps Ethernet ports might have happened earlier, but vendors assumed that business-technology execs would need massive throughput to send data beyond their companies over public networks. Vendors primarily focused on products that meshed with the telecommunication companies' networks, Gross says, and doing that made the equipment very expensive.

As it turns out, even early adopters used 10-Gbps Ethernet mostly for internal network needs, usually for distances of less than 100 meters. In some cases, 10-Gps Ethernet was overkill, given the cost of the systems.

Now, a phalanx of vendors is pushing the equipment. Sunay Tripathi, chief architect for FireEngine, Sun Microsystems' new Ethernet stack, has been quoted saying that Infiniband was "interesting" five years ago, but 10-Gbps Ethernet's price drops have changed people's view.

Others in the game include Cisco Systems, Extreme Networks, Foundry Networks, Force10, InfiniCon, Topspin, and Voltaire. They will see total revenue from 10-Gbps-network ports of all stripes rise from $570 million next year to $3.3 billion by 2009, Gross says. The newer, less-expensive version of 10-Gbps Ethernet will account for two-thirds of the 10-Gbps market next year, he says, and will be 80% of the market in 2009.