Infonetics predicts 10-fold boost in 10 GigE sales

The need for more frequent backups is driving demand for 10 Gigabit Ethernet switches, a market that is predicted to grow tenfold over four years, according to a report published this week by Infonetics Research of Campbell, Calif.

The report, dubbed 10 Gigabit Ethernet Market Outlook, says network equipment makers shipped switches, routers and other gear with a total of 300,000 Gigabit Ethernet ports in 2006. Infonetics forecasts that figure will rise to 3 million by 2010.

“A lot of companies are moving gigabit out to the desktop,” said Matthias Machowinski, Infonetics’s directing analyst for enterprise voice and data. As a result, he added, some IT departments are having to install switches or routers supporting speeds of 10 Gigabit per second (Gbps) in the network core.

The standard for 10 Gigabit Ethernet, 802.3ae, was ratified by the Institute of Electrical and Electronics Engineers more than five years ago. However, most switches purchased today have with ports running slower speeds, Machowinski said. An Infonetics quarterly report on the Ethernet and Application Switch market, which has not been released yet, shows only 0.9 per cent of ports on equipment shipped during the third quarter of 2007 were 10 Gig Ethernet.

Infonetics predicts shipments will rise due in part to a desire to use networks to backup data more frequently. “If costs come down, some people might decide, ‘Maybe I’ll do a daily backup,’ Machowinski said. “Can you get away with using the version from last week or does it have to be the version from this morning?”

Other factors driving 10 Gigabit Ethernet growth include the low cost of Ethernet relative to other high-speed technologies, and the increased use of video and other applications that require high-speed networks.

When upgrading to new hardware, some companies will install 10 Gigabit Ethernet equipment even if they don’t need it immediately, Machowinski said.

“You get to a point where people will decide they will go out and buy something even it they don’t truly need it,” he said. “It’s the whole idea of future-proofing. They will say, ‘For a little bit more, I will buy this.’”

Carriers and service providers are also interested in 10 Gigabit Ethernet to allow them to offer higher-speed services while keeping their costs down.

“Carrier Ethernet is growing, on average, about 60 per cent per year,” he said. “Carriers … will see a lot of this traffic growth and this is one way of providing the bandwidth and at the same time keeping expenditures in check. Just because traffic doubles, doesn’t mean you revenue will double.”

A separate Infonetics study released last month predicts sales of Metro Ethernet equipment will double between 2006 and 1010.

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