Gigabit Ethernet prices in free fall

An abundance of inexpensive Gigabit Ethernet switches and network interface cards is changing the way networks of all sizes are connecting servers and end users.

Copper-based Gigabit Ethernet began shipping en masse last year. Since then prices have dropped steadily as vendors - even market newbies such as Dell - have raced to put 1000Base-T products in their portfolio.

Last week, several equipment makers announced wares that offer low prices for Gigabit Ethernet connections along with additional management and switching functions.

Puredata led the way with an eight-port Gigabit Ethernet switch for less than $91 per port, aimed at small network backbones or "power user" workgroups.

Netgear - which offers 12- and 24-port Gigabit switches priced similar to Puredata's new box - released a managed workgroup switch with Gigabit uplinks for about $850.

This week, 3Com will release a similar product that can also switch traffic at Layer 4.

Allied Telesyn also released a Gigabit Ethernet NIC for less than $100.

An extreme boost

Sierra Nevada, which makes air traffic-control equipment for the Department of Defense, recently used copper Gigabit, or 1000Base-T, equipment from Cisco to upgrade the LAN backbone at its Sparks, Nev., headquarters.

"The copper Gigabit has given our servers an extreme boost," says Craig Cuthbert, Sierra Nevada's network engineer. The company added a 12-port 1000Base-T module to its Cisco Catalyst 4006 and added Intel copper Gigabit NICs to its servers. "Our server links are running around 10% to 15% utilization, whereas before we were regularly getting up to 90% utilization on our [Fast Ethernet] links."

The copper Gigabit gear used at Sierra Nevada was not significantly less expensive than fiber products, Cuthbert says, but the use of Category 5e copper cabling instead of fiber Gigabit was an advantage "because the cost involved with installing fiber is high, and running and replacing the Cat5e cables is so easy."

LAN upgrades like the one at Sierra Nevada have helped keep the market for 1000Base-T gear strong, with 25% quarter-over-quarter growth in 2001, according to Cahners In-Stat Group. By contrast, the overall Ethernet LAN switch market last year averaged around 3% growth per quarter. Market leaders in terms of 1000Base-T switch shipments were Cisco with 47%, followed by 3Com with 17% and Hewlett-Packard with 11% of the market.

Solving bottlenecks

"No one wants to replace [cabling] because it is so expensive," says Lauri Vickers, a Cahners In-Stat analyst. "Companies that may have had bottlenecks in the wiring closet but didn't have the budget to run in-wall fiber cabling are looking at copper Gigabit to solve those problems." Besides savings on cabling costs, Vickers says, the 1000Base-T equipment itself averages around one-third the cost per port of single-mode, fiber-optic cable.

The price of Gigabit Ethernet products the past few years has fallen dramatically. Research from IDC shows that the average price for a fixed-configured Gigabit Ethernet switch port has dropped from about $800 per port when the technology was introduced in 1998, to $219 per connection this year. Likewise, Gigabit NICs also have come down in price from an average of $500 in 1999, to the $200 range today (roughly three times the price of 10/100M bit/sec Ethernet cards).

While inexpensive Gigabit NICs might seem to signal an imminent explosion of 1G bit/sec desktops, Vickers has more reserved predictions.

"[Vendors] are pushing Gigabit to the desktop, but we are still a ways away from that," Vickers says. "The economic slowdown has pushed off a lot of desktop purchases [in companies], and there still isn't a real killer app for it."

One firm blazing the Gigabit desktop trail is Health Communications. The healthcare marketing services firm in Nashville runs a creative department, which consists of 12 Macintosh G4s used as workstations and servers. The machines are used to digitally create marketing materials and video products. When the department outgrew its space and had to move, Keith Mattila, the firm's interactive services director, saw the opportunity to escape from the group's 10Base-T hub-based network.

"When we moved, we had the opportunity to do it right, and went ahead with wiring all connections with switched Gigabit over the copper," he says. "We looked briefly at Gigabit from a fiber standpoint, but we just couldn't cost-justify it." He adds that wiring the office with fiber would have doubled the cost.

The increased performance of the network has let the company turn projects around quicker, letting it take on more work and lower costs for its clients.

"When you can drag a 300-meg file over to your desktop from the network, or even open it up from the server, that's a big deal," he says.