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Security needs, prices heat Ethernet switch market

Corporate customers are upgrading to higher-speed Ethernet equipment, partly to keep their networks safer.

New network requirements for security and falling prices on 1-gigabit-per-second and 10gbps Ethernet interfaces are prompting more companies to upgrade to high-speed, intelligent switches at the edges of their networks.

Alcatel and Hewlett-Packard's ProCurve Networking division are the two latest companies to introduce new products offering low-cost 1gbps interfaces and 10gbps Ethernet ports, designed specifically to fit into the wiring closet.

Alcatel announced the OmniSwitch 6800, a family of small Gigabit Ethernet switches with 10gbps uplinks. ProCurve introduced the 6400cl series. This switch can be used to aggregate traffic from the 3400cl, a family of Gigabit Ethernet switches that have 10gbps Ethernet uplinks.

Last week, Cisco also updated its Ethernet switch portfolio, putting higher-speed 10gbps Ethernet interfaces on some of its access switches. The company also added several new features to its access routers, which had previously only been available in its core switching products.

In the past, most network upgrades were driven by the need for faster connections. But today, sales of Ethernet switches are also being driven by the need for more services, such as quality of service and security, according to a recent report from Synergy Research Group.

Companies upgrading to higher-speed switches today are doing it as part of a more critical upgrade to protect their networks and offer new services. Even though most applications still don't require 1gbps to the desktop, many companies are opting for the faster switches to future-proof their networks.

"The price difference between a fast Ethernet port, which sells for $50 a port, versus a 1gbps Ethernet port, which sells for about $100 per port, is so insignificant, many people just go for the faster interfaces," said Mark Thompson, worldwide sales and marketing manager of ProCurve. "That way, they won't have to upgrade their network again in another two or three years, when they need the higher performance."

The biggest driver of network upgrades recently has been the proliferation of wireless and remote access, said Brian Witt, Alcatel's director of product marketing. These technologies have changed requirements for corporate networking.

"Wi-Fi and remote access require better authentication and better security, such as virus protection," Witt said. "That's why it's important for us to make our switches more intelligent."

The trend toward 1gbps Ethernet to the desktop has also helped fuel growth in the 10gbps Ethernet market. Synergy said in its switching report that 10gbps Ethernet was gaining momentum in mainstream markets, distancing itself from pure scientific and research applications. Over the past year, prices have fallen dramatically on 10gbps Ethernet interfaces. And the adoption of the new 10gbps Ethernet copper standard has also helped reduce prices and spur adoption.

According to Synergy, there was an 83.7 percent increase in the volume of 10gbps Ethernet port sales and a 44.1 percent increase in sales for 10gbps Ethernet in the third quarter of 2004 from the previous year.

The equipment vendors are poised to take advantage of this upgrade cycle. Alcatel's new OmniSwitch 6800, with 24 ports of 1gbps Ethernet and two ports of 10gbps Ethernet, has a list price of $$9,490. ProCurve's 6400cl series switches are expected to be available in the first half of 2005. The switches range in price from $5,429 for the 10-gigabit Ethernet copper version to $8,099 for the 10-gigabit Ethernet fiber version.