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Ready When You Are

The economics of moving to Gigabit Ethernet get more attractive

Timothy Link is a speed freak. The CIO of the Newark campus of Ohio State University and Central Ohio Technical College moved the schools to the forefront of high-speed networking last month when they opened the John Gilbert Reese Center. The state-of-the-art conference center with faculty offices and classrooms provides Gigabit Ethernet to desktop PCs, all connected by a 10-Gigabit Ethernet backbone network. Link is so impressed with the bandwidth the network provides that he's upgrading all the networks at both schools to gigabit speeds. And the two schools, which share a campus, will be linked to an even faster fiber network under construction that will connect all major universities in the state.

Ohio State's Link likes Gigabit Ethernet's fat pipes so much he's moving all the Newark-campus networks to the faster speed.

Photo by Janet Adams
"In the past, we had a two-lane highway," Link says. "Now we've got a big superhighway." The additional bandwidth will be used for applications such as streaming multimedia, distance learning, and point-to-multipoint transmissions. "We needed a more robust network," he says.

So do many businesses whose networks increasingly are clogged with fat files. Media, health-care, and engineering companies are deploying faster networks to handle the transmission of television shows, medical images, and architectural drawings. Even the military needs more network capacity for high-resolution battlefield imagery.

More than half of 300 business-technology professionals surveyed recently by InformationWeek Research say boosting bandwidth will be a priority this year. Most have been running Ethernet (10 Mbps) and Fast Ethernet (100 Mbps) networks for years.

The move to Gigabit and 10-Gigabit Ethernet is under way, according to research firm Dell'Oro Group. About 7 million Gigabit Ethernet ports were shipped last year, and Dell'Oro predicts that number will jump to 12 million this year and hit 22 million next year. By 2007, gigabit-speed gear will make up 65% of Ethernet-switch revenue, up from 29% in 2002, the research firm says.

While sales are still small, they're growing fast enough to boost an otherwise sagging networking market. In the second quarter of this year, the Ethernet-switch market grew 2% from the first quarter, an uptick attributable almost entirely to Gigabit Ethernet, according to Dell'Oro Group. Most of the switch-market growth will come from sales of gigabit-over-copper gear, rather than equipment for fiber networks, says senior analyst Seamus Crehan. In the router market, 10-Gigabit Ethernet hardware was the only segment out of five that showed any growth, jumping 10% for the quarter.

Some analysts caution that most companies don't yet need to spend on Gigabit Ethernet capacity. "Even if you're converging voice, it's only a 64 [Kbps] bitstream," says Meta Group analyst David Willis. "That's really nothing."

But for businesses that already need the bandwidth or that want to future-proof their networks, the economics of moving to higher-speed networking technology are becoming more attractive. Less than a year ago, for example, Hewlett-Packard released a single-port, 10-Gigabit Ethernet blade switch that listed for $72,999. A new dual-port module for that switch, released last week, lists for $35,699.

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