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Technology Stocks : COMS/USRX
COMS 0.001300.0%Nov 4 10:50 AM EST

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To: Jeffery E. Forrest who wrote (1211)4/11/1997 12:32:00 PM
From: Jeffery E. Forrest   of 1384
 
FAST ETHERNET

Give Yourself A Choice

By Michelle Rae McLean

Falling prices for fast-Ethernet hubs have rekindled the debate over whether switched
10Mbps or shared 100Mbps services a network better. Unfortunately for most
network managers, that debate remains purely academic: The reality of their installed
base of 10Mbps adapters makes only one of those upgrade choices possible.

When fast-Ethernet devices first came to market, their vendors promoted the
advantages of the extra bandwidth. The number of users per segment might reduce
average bandwidth per user, they conceded, but applications could go much faster than
a 10Mbps limit, improving performance. They cited tasks such as large file transfers
and intensive database applications as key elements that would reap the rewards of fast
Ethernet's additional bandwidth.

In the face of this competition, advocates of Ethernet switches reinforced their
arguments for dedicated 10Mbps links. The overall throughput may be more limited,
they said, but dedicated connections provide constant access to the link. The lack of
contention enables users to take advantage of emerging real-time or near-real-time
applications, which shared segments cannot support successfully.

Vendors, the press, and industry pundits have joined in this debate. According to
conventional wisdom, over the last year or so managers everywhere have been buying
10/100Mbps adapters and have had to make this infrastructure choice. The price
difference between a 10Mbps-only and a dual-speed adapter is so small that the
decision to pay for the extra insurance is a no-brainer, or so we believed.

As it turns out, we were wrong. As of last fall, only 20 percent of the 3Com Corp.
adapters going out the door were 10/100Mbps versions. That percentage has climbed
slightly to 30 percent, but 3Com alone still accounts for the installation of around 1
million 10Mbps-only cards each month. Evidently, prices--not price deltas--drive
sales.

Now I can imagine a bunch of fast-Ethernet fans jumping up and down right now about
how 3Com doesn't accurately represent the 10/100Mbps NIC market. The company
is more closely focused on the low end of the market and on high volumes, these
pundits will argue. But even companies professing to be more closely oriented toward
server and high-end installations can't boast that nearly all their NICs sold are fast
Ethernet-capable. Compaq Computer Corp. says that about 40 percent of the NICs it
sells are 10/100 Mbps versions; for Hewlett-Packard Co., the figure is around 60
percent.

But the price war on 10/100Mbps cards that began in February should boost the
percentage of 10/100Mbps NICs being installed. The cost of dual-speed adapters has
fallen as low as $85 in some cases, so managers who thought fast Ethernet was beyond
their price range should reconsider their position. After investigating their vendors'
prices, they may learn the costs have finally dropped enough to make buying
dual-speed the no-brainer decision we had assumed it already was.

The pundits weren't wrong about insurance being a good idea--they were wrong just
about the timing. Insurance has gotten cheaper, and so the moment has arrived for
managers to reshape the landscape of adapter installations. That way, at least,
managers will be able to make an infrastructure choice, and the debate over shared
100Mbps vs. switched 10Mbps could become interesting again.
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