Latest incarnation of Ethernet to boost speeds tenfold

An army of networking firms are working with an industry group to bulk up Ethernet, the most popular networking technology used to link PCs and server computers on department networks, allowing them to share information.

Their goal is to improve on the technology and make it fast enough to help unclog the congestion not only on corporate networks, but on the Internet as well.

With corporations' appetite for network capacity seemingly insatiable, firms like Cisco Systems and Nortel Networks believe an even faster version of Ethernet is necessary to provide the "bandwidth," or network space, needed in today's business environment. Companies are looking to increase network capacity to exchange larger files, conduct meetings or training classes online, or make phone calls over the Net.

"It's all about bandwidth: better, faster and cheaper," Forrester Research analyst Charles Rutstein said. "At the rate traffic is growing on the Internet and private networks, it just makes sense."

Today, most businesses use Ethernet-based connections that run at either 10 or 100 megabits-per-second (mbps). That is the rate that bits of information travel across a network. A version of Ethernet that reaches gigabit-per-second speeds is just now catching on, but networking firms are already working on what they claim will be a two-year effort to make the technology 10 times faster.

But the question remains: Is this capacity necessary?

Networking firms and analysts say it is, even though gigabit-speed Ethernet is just now being adopted by businesses. After years of hype, the market for gigabit Ethernet-based equipment is starting to take off as sales reached $1.6 billion in 1999, according to International Data Corp. Revenue grew from $228 million in the first quarter of 1999 to $534 million by the end of the fourth quarter.

"Think about your commute every day. We make more lanes on freeways, and it gets recongested," said Bruce Tolley, product manager for Cisco's enterprise line of business. "We're starting to work on 10 gigabit now for the bandwidth requirements two years from now. We can't wait for (current) gigabit to become clouded and congested and then say, 'Oh, we need to get more bandwidth.'"

With 10-gigabit Ethernet, Internet service providers (ISPs) and telecommunications carriers will be able to use, for the first time, Ethernet-based networking equipment for even the most demanding tasks, according to analysts and executives.

They say 10-gigabit Ethernet may serve as a cheaper replacement for other high-speed networking technologies, such as asynchronous transfer mode (ATM). The result, Ethernet proponents say, would be cheaper and more plentiful bandwidth, as well as the ability to run Ethernet-based systems everywhere, from corporate networks to longer-distance links.

"It will appeal to any business with escalating bandwidth demands," said Current Analysis analyst Ron Westfall. "Banking and financial institutions, for example, have a whole host of real-time transactions, like online orders, that requires a vast amount of bandwidth. More capacity will allow them to maintain their competitiveness."

An industry standards group, the Institute of Electrical and Electronics Engineers, is expected to approve a 10-gigabit Ethernet standard by spring 2002, with the first products from networking firms shipping just before that, according to executives.

Bernard Daines, chief executive of World Wide Packets and one of the founders of the gigabit-speed Ethernet movement, said he expects the technology will be adopted across long-distance networks.

"If you look at the various versions of Ethernet--10/100, gigabit and 10 gigabit--there's been an incumbent out there that Ethernet has beaten out each time," Daines said.

While rival networking firms have formed an alliance to help create the new standard, they have different business strategies in hopes of capturing a bigger share of the lucrative network equipment market for service providers.

Nortel, which trails behind Cisco in the routing device market, said 10-gigabit Ethernet could make routers obsolete. Nan Chen, director of Nortel's technology center, said routers are currently needed to translate the different networking protocols used to transfer data from a corporate network (which uses Ethernet) through the Internet (which uses ATM or other technologies).

If Ethernet is used in Internet equipment, then routers won't be needed, Chen suggested.

Cisco disagrees, saying they will remain technologically agnostic and support Ethernet as well as other technologies in their Internet-based routing equipment. Companies won't simply rip out all the technology they have already installed, said Cisco's Tolley.

"Cisco is not religious," he said. "From our perspective, it's an installed base issue."

Either way, 10-gigabit Ethernet represents the industry's latest effort to ease network congestion in an attempt to improve people's computing and Web experience.

"The easiest and cheapest way to do that," said 3Com technology marketing manager Edward Hopkins, "is to put more bandwidth to the problem."