40/100G Ethernet needed, but too pricey

Network World - SAN JOSE -- Though demand for 40G and 100G Ethernet is on the rise, prices need to come down to earth before mainstream adoption can occur, experts at an Ethernet conference said here this week.

Currently, the cost of a 40G Ethernet link on single mode or multimode fiber is about $8,000, or six or seven times that of a 10G link, participants at the Ethernet Technology Summit said. A 100G Ethernet link on single mode or multimode fiber can cost $25,000 – up to 20 times that of a 10G Ethernet interface, they say.

100 Gigabit Ethernet: Bridge to Terabit Ethernet

Such economics, coupled with the fact that the IEEE 802.3ba standard for 40/100G Ethernet is still three to four months from ratification, is keeping demand muted even though interest is high.

"We want the race car without paying race car prices," Brad Booth, founder and board chair of the Ethernet Alliance, said during his keynote address. "The cost of the optics is still not competitive. That's where this industry needs to focus."

Analyst Michael Howard of Infonetics Research says it will be 2015 before 100G Ethernet is priced for the market.

The price differentials are similar to those of 1G to 10G Ethernet when 10G emerged. At that time, 10G cost $39,000 per port.

Participants at the Ethernet Technology Summit say 40G Ethernet will eventually follow a similar price decline curve as 10G when it ships in increasing volumes. And 100G is expected to follow 40G's declines.

Paul Hooper, chief marketing officer at Extreme Networks, says his company is working on 40G and 100G Ethernet interface modules. There is pent-up demand for 40G Ethernet switching in the banking, healthcare and media markets – the same customers that buy Extreme's "40/100G ready" Summit X650 and BlackDiamond 8900 switches, he says.

As for 100G Ethernet, there is interest among Extreme customers but not real demand, Hooper says.

Activity in 40G may start to ramp fairly soon. In addition to the standard being ratified in June, Summit participants say they expect 40G Ethernet products to be introduced and on demonstration at the Interop trade show and conference in April.

"We think that 40G is due even though we're just ramping up 10G Ethernet," says Bill Lee, senior product marketing manager at Mellanox, a maker of Infiniband and Ethernet data center switches.

Mellanox introduced a 40G Ethernet adapter last September that it sells to OEMs for $5,000. Mellanox expects to sell more of the adapters once switches equipped with 40G Ethernet ports emerge later this year.

Nonetheless, the company received two inquiries in the past week for the 40G Ethernet card, Lee says.