Putting Layer 3 into Netgear

Netgear Inc. says its new switch speaks to a growing need among small- and medium-sized businesses (SMBs) for Layer 3 functionality, but one industry analyst questions the vendor’s line of thinking.

The Santa Clara, Calif.-based network equipment manufacturer in July unveiled the GSM7324 24-Port Layer 3 Managed Gigabit Switch, a box for SMBs that keeps its target audience’s needs in mind.

According to Peter Newton, a Netgear product line manager, SMBs increasingly seek Layer 3 functionality to support advanced network services, notably IP telephony and videoconferencing. However, SMBs do not want the capital and operational expense of managing software-based routers, he said, pointing out that with a Layer 3 switch, “they can do it much faster because it’s running in silicon, and it’s relatively cheap. The switches are much less expensive than the routers.”

Priced at US$145 per port, Netgear says the GSM7324 rings in as a lightweight in the cost department. The switch comes with a five-year warranty and 24-7 technical support.

Despite the switch’s low price, Stan Schatt, an analyst at Cambridge, Mass.-based Forrester Research Inc., questioned Netgear’s strategy.

“Layer 3 is complex. I’m not convinced that a lot of small businesses have the support systems in place to do that sort of thing. They may just have some kind of self-taught administrator who’s just trying to keep everything working,” Schatt said.

Still, “when you start to add video and voice over IP, there’s something to be said for being able to route the protocols and prioritize the protocols – use quality of service at Layer 3 to ensure that your latency is low.”

According to Knecko Burney, chief market strategist at Scottsdale, Ariz.-based In-Stat/MDR, the GSM7324’s usefulness is a function of how one defines “SMB.”

For “a company that has more than…50 employees, where they’ve got multiple nodes on their network, Layer 3 functionality becomes more important,” she said, pointing out that routing is a significant aspect of network management in complex environments.

Netgear also faces an uphill battle in another respect, Burney said. “The Netgear brand has been…very consumer, very small-business [focused]. In order for them to break into a more serious business brand, it won’t be without challenges.”

Newton said the company would build upon the positive customer relationships it has fostered through its solid Layer 2 equipment to earn the mid-sized firms’ trust in Layer 3. And as for the SMB’s needs, he said it’s only a matter of time before small businesses start clamouring for Layer 3 functionality.

The GSM7324 offers Layer 2 and Layer 3 switching with quality-of-service features like DiffServ, bandwidth provisioning and access control lists, Netgear said. The device has 24 copper Gigabit Ethernet ports and four small form-factor pluggable (SFP) modules for fibre-optic connections.

The 1U box comes with a browser-based configuration interface that Netgear says is easy to use. It also offers Router Information Protocol (RIP) I and II functions, as well as OSPF2 for network resiliency. It incorporates the Virtual Router Redundancy Protocol (VRRP), allowing network managers to use a back-up router or Layer 3 switch should the primary box falter.

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Jim Love, Chief Content Officer, IT World Canada

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