Growth In Unexpected Places: Cisco Copes With Adventuresome Startups As Networking Goes To 10 GbE; Market Strength Seen In Downturn

Ciscos Nexus switch hs determined competition

Cisco's Nexus switch hs determined competition

One of the hottest areas of networking can be found in one of the least likely places: the slow-growth switch market.

The technology for giving standard gigabit Ethernet networks the juice to run 10-times faster at 10 gigabits has been around for several years. It is finally catching on as network managers cope with an explosion of traffic from online video, servers with virtualization, multi-core chips and data-center consolidation.

“The market is poised for huge growth,” says Dell’Oro Group Senior Analyst Alan Weckel. “It’s a good market to be in.”

It also is an ultra competitive one. Reminiscent of the early days of networking before Cisco Systems consolidated the market, a wave of startups hopes to take on established players Cisco and Juniper Networks.

Many have rolled out new products – including Cisco – showing their determination. But while room exists for some to make a living, up-ending the giant is going to be difficult.

Ten GbE is already a big market in the data center. Revenue has been over $1 billion since 2006 and is expected to jump 60 percent this year to $2.8 billion, says Dell’Oro Group Senior Analyst Alan Weckel.

Sales should climb 23 percent to 3.5 billion next year despite the downturn and show another 20 percent rise in 2010.

“It’s starting to hit a tipping point with 10 GbE,” agrees Cisco’s Omar Sultan, senior manager for data center solutions.

One key catalyst for the market has been the falling price of 10 GbE interface, or connection, technologies along with the fact that the links are now being built into servers, says Juniper.

Clearly, the market is worth the fight. Eager to protect its turf, Cisco launched the Nexus switches early this year. Arista Networks, with its year-old 7100 series, made news last month when recruited Sun Microsystems legendary designer Andy Bechtolsheim and Cisco veteran Jayshree Ullal. Blade Network Technologies has the RackSwitch G8000, and Woven Systems this month rolled out the TRX 200. Juniper is already in the market, along with Force10 Networks. Expected to compete as well is Foundry Networks, which is being acquired by Brocade Communications Systems

Companies like Arista claim their low prices will win the day. But Cisco’s Nexus 5000 also has an attractive price of its own, blunting this cost advantage.

“It’s not just one really cool point product, says Sultan, but a broad portfolio of network gear that attracts customers. Cisco also differentiates itself with technology to run existing fiber channel storage networks over Ethernet, which it claims will simplify building networks. And it claims its Data Center Ethernet protocol is more reliable, though some argue it falls short of the goal of guaranteeing delivery of data packets, therefore leaving an opening for other vendors.

In some ways, the 10GbE market is reminiscent of the 1 gigabit Ethernet market that emerged about a decade ago. The technology also offered a 10-fold increase in raw speed and ushered in upgrades of network equipment that started in data centers and eventually stretched all the way to the desktop.

This time, the market is more fragmented and will require companies to bring out gear targeted to specific uses: providing fast pipes to single high-use servers, building data-links to storage perhaps with the fiber channel over Ethernet protocol, and aggregating data centers for efficiency.

That may open niches for ambitious companies to mine.

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