MARKET TRENDS
Gigabit Ethernet--The Market Takes off
Volume 29, Number 4
April 1999, pp. 32-35
By Greg Collins, senior analyst, and Tam Dell'Oro, founder of the Dell'Oro
Group.
The following is an abstract of the printed article:
Ethernet and Fast Ethernet have proved resoundingly
successful, but how will Gigabit Ethernet fare? This article
discusses the prospects for Gigabit Ethernet switches in terms
of the market size, pricing and the players.
Market Size
The market for Gigabit Ethernet grew from 12,000 ports in 1997
to 222,000 ports in 1998--nearly a 20-fold increase. Several
events in 1998 set the stage for this strong growth. First, the
IEEE ratified the Gigabit Ethernet standard (802.3z) in June.
Second, all major networking vendors and numerous startups
began shipping Gigabit Ethernet products. Third, it soon became
clear that Gigabit Ethernet is a reality, and network managers
began to budget for these new products.
Gigabit Ethernet shipments will likely grow eightfold to 1.8 million
ports in 1999 and to nearly 18 million ports by the end of 2002.
Pricing
Manufacturers' prices for Gigabit Ethernet products fell from
$1,700 per port in 1997 to $1,200 in 1998--a 29 percent decline.
This decline contributed to the sharp increase in shipments
during 1998.
Players
The 20 vendors who sell Gigabit Ethernet fall into three
categories:
Small firms who developed the technology on their own
(Alteon Networks, www.alteon.com; Extreme Networks,
www.extremenetworks.com; Foundry Networks,
www.foundrynet.com; and XLNT, www.xlnt.com).
Large firms who developed the technology on their own
(3Com, www.3com.com; Xylan, www.xylan.com--the latter to
be acquired by Alcatel, www.alcatel.com).
Large firms who acquired the technology (Alcatel; Fore
Systems, www.fore.com; Cabletron, www.cabletron.com;
Lucent, www.lucent.com; Nortel, www.nortelnetworks.com; and
Cisco, www.cisco.com).
The Future
Gigabit Ethernet will fare quite well, particularly the products
destined for the core and distribution layers of the network.
Gigabit Ethernet's success in the WAN/edge layer will depend on
its ability to render obsolete the technology used in legacy
routers and their successors.
Regards
Neil |
