Packet-Switched vs. Circuit-Switched Networks

Definitions: Packet-switched networks move data in separate, small blocks -- packets -- based on the destination address in each packet. When received, packets are reassembled in the proper sequence to make up the message. Circuit-switched networks require dedicated point-to-point connections during calls.

Circuit-switched networks and packet-switched networks have traditionally occupied different spaces within corporations. Circuit-switched networks were used for phone calls and packet-switched networks handled data. But because of the reach of phone lines and the efficiency and low cost of data networks, the two technologies have shared chores for years.

Designed in 1878, circuit-switched networks reserve a dedicated channel for the entire communication.

The primary hardware for a circuit-switched network is the private branch exchange (PBX) system. Computer servers power packet-switched networks.

In modern circuit-switched networks, electronic signals pass through several switches before a connection is established. And during a call, no other network traffic can use those switches.

In packet-based networks, however, the message gets broken into small data packets that seek out the most efficient route as circuits become available. Each packet may go a different route; its header address tells it where to go and describes the sequence for reassembly at the destination computer, says Joel Maloff, president of consultancy Maloff Group International Inc. in Ann Arbor, Mich.

Technologies Converge

Formerly, packet-switched digital networks would connect to circuit-switched ports to gain access to computer networks in different locations. But nowadays, remote dial-up access to corporate computers is usually over the Internet, using global Internet service providers (ISP), says Ron Westfall, an analyst at Current Analysis Inc. in Sterling, Va.

"For a large organization, the payoff is self-evident," says Westfall. "If you can go from paying for one long-distance call from a hotel in Singapore to (paying for) one local call to an ISP in Singapore and another call to the ISP near your headquarters in New York, you're only paying for two local-access charges."

With the expanded use of the Internet for voice and video, analysts predict a gradual shift away from circuit-switched networks.

"A circuit-switched network is good for certain kinds of applications with limited points to go to. If you're doing voice applications solely, it's great," says Maloff. "But if you have multiple locations to get to and large amounts of data to transmit, it's better to break it down into packets."

Voice-over-IP vendors point out that IP-based calls are cheaper than circuit-based ones, but analysts say it will be a long time before corporations abandon proven PBX systems and use packet-based networks for data, voice and video. The biggest impediment to voice-over-IP is poor voice quality and call latency, says analyst Michael Arellano at Degas Communications Group Inc. in Westport, Conn. "With packet-switched networks, what happens if the packets containing voice signals arrive at different times or in a different order? (A congested network) can also drop packets."

"Currently, there's a PBX side of the house and an IT side of the house," Westfall says. "But if you survey IT managers, they're not hopping up and down to put voice on data networks. They have enough challenges maintaining the data network."

"PBX is a proven technology. Although it's proprietary, it's efficient at delivering voice traffic and offering features like voice mail," Westfall says.

"Packet switching is more efficient," Maloff agrees. "But we'll have hybrid systems for the next several years."

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