Web switch vendors evolve

Not long ago, Layer 4 to Layer 7 technology was sought after by dot-coms and service providers for its ability to speed Web traffic. But as these firms started to whither in the souring economy, Layer 4 to Layer 7 switch vendors saw the market drop from $613 million in 2001 to $592 in 2002, according to IDC.

Some industry watchers say a distinct Layer 4 to Layer 7 switch market no longer exists. Larger enterprise firms such as Nortel and Cisco bought many of the start-ups, such as Alteon and ArrowPoint, in 2000. And it is enterprise LAN switch vendors, not Web switch specialty firms, that dominate the overall market for Layer 4 to Layer 7 gear today.

But emerging arenas for the application and load-balancing switches do exist, vendors and analysts say. Security, Web services acceleration and blade server load balancing are among some potentially ripe areas.

Layer 4 switches, known sometimes as load balancers, can redirect traffic to available nodes in a server farm by reading Layer 4 TCP server port information that's embedded in incoming IP packets. Layer 7 switches, known as Web or application switches, look at application-layer data inside. Doing this, the boxes can provide more advanced forwarding or filtering on traffic flows based on the network application to which they belong.

Cisco led the worldwide market for these products in 2002, with almost 30% of the $591 million market. Extreme Networks is second with a 21.6% share, followed by Nortel with 13.2%, F5 Networks with 13%, Radware with 10% and Foundry Networks with 7.6%. In terms of shipments, Extreme was the leader with 331,300 Layer 4 to Layer 7 ports (or 38% of the market), followed by Cisco, Foundry and F5.

In addition to offering Layer 4 to Layer 7 products, Cisco, Extreme and Nortel also have gained a strong market presence by integrating load-balancing and Web-switching technology into blades on their respective switch chassis.

A Yankee Group survey of 500 enterprise IT equipment buyers showed that two-thirds of the respondents preferred to have load-balancing technology integrated into switches from their regular LAN vendors.

"The result of that is the preponderance of the Layer 4 to Layer 7 market goes to Cisco and Nortel," says Zeus Kerravala, an analyst with The Yankee Group. "There really is no reason to have a stand-alone product to do a lot of what Layer 4 to Layer 7 switches do. It's easier to manage and deploy those services in a regular switch."

Kerravala says the buying patterns for load-balancing and application switch products are different than for regular LAN gear. Often, server or data center staff makes the buying decisions about Layer 4 to Layer 7 gear, instead of network administrators because the boxes are tied so closely to specific nodes, such as servers or security appliances.

IDC estimates that Layer 4 to Layer 7 ports account for only about 5% of all Ethernet ports shipped, whereas Layer 2 accounts for more than half, and Layer 3 makes up around 40%.

Load-balancing and Web switch gear also is priced at a premium because the technology is more complex. The average price for a Layer 4 to Layer 7 switch port was about $680 - almost double the price of Layer 3, IDC says, and far more expensive than Layer 2 gear, at $73 per port.