Data, disaster recovery driving 10-gigabit ethernet

By Maria Trombly | Securities Industry News | Sep. 23, 2002

With the approval of 10-gigabit Ethernet as a standard for transmitting data over networks earlier this summer, vendors have already begun rolling out products, though many are waiting for prices to drop. Ten times faster than its predecessor (one gigabit per second), 10-gigabit Ethernet promises faster backup and recovery, and more bandwidth for data-intensive applications such as video teleconferencing.

It is a necessity for large corporations that continuously place large demands on their networks, as well as for Internet service providers, said Anthony Skipper, VP of architecture for Web services at Princeton, N.J.-based Merrill Lynch. "The benefits of 10-gigabit Ethernet will not be fully realized by most users and applications for some time, as most applications can't scale up to that level of bandwidth," he said. "But for anyone with a large network infrastructure, 10-gigabit Ethernet will shortly become a must-have."

First, 10-gigabit Ethernet makes it possible to back up data faster and recover it in case of an emergency. Second, it may enable firms to do away with some of the other alternatives-which can be costly, inflexible, or create management problems.

Today, Fibre Channel, another communication standard, is popular for moving large volumes of data over long distances. That means that Ethernet data has to be converted to Fibre Channel and then converted back again on the receiving end, adding delays.

"Now you can have end-to-end Ethernet," said Richard Brand, director of network architecture and applications at Ottawa-based Nortel Networks Corp. and president of the 10-Gigabit Ethernet Alliance. "This is where 10-gigabit Ethernet is very interesting. If a Wall Street company has information on file in New York and wants to transmit it to Los Angeles-now you can send data without going through a conversion process. You can go right to your lease line or carrier and Ethernet all across the United States."

A related driver is networked storage.

"Wall Street firms are all investigating storage over IP [Internet Protocol]," said Steve Mullaney, VP of marketing at 10-gigabit Ethernet vendor Force10 Networksbased in Milpitas, Calif. "Today, 5 percent of traffic on the IP network is storage. If I bring my storage onto IP, now it's 50 percent of the traffic. Many of the Wall Street guys have told me that they're going to need 10 gigabits once they move storage onto the IP network."

Aggregation is another top driver for the financial services-managing one 10-gigabit pipe is easier than managing 10 one-gigabit pipes.

"The savings are pretty significant," Thompson said.

In addition, more and more desktop and laptop computers are shipped with one-gigabit connections built right in, said David Passmore, research director at Salt Lake City, Utah-based Burton Group.

That means that the network has to be several times faster to support those connections-which leads right to 10-gigabit Ethernet.

Previously, desktop computers had 100-megabit connections, which were easily supported by a one-gigabit backbone. One application that can immediately take advantage of fast connections is backups, he said.

"As hard drives get bigger, backing them up with fast Ethernet [100 megabits per second] takes forever," he said. "Doing it with a gigabit to the desktop, it becomes feasible."

Networked storage and video teleconferencing are other examples of fast-growing, bandwidth-intensive applications.

The growth of the Internet will also help drive the switch to 10-gigabit Ethernet, according to Nick Lippis, president of Lippis Consulting. Lippis, who has designed networks for several Wall Street firms, said he has been seeing upgrades to 10-gigabit Ethernet in public-access Web sites.

"The one-gigabit links they have going into servers are starting to get a little strained," he said.

The biggest disadvantage to 10-gigabit Ethernet is the price.

A typical 10-gigabit link costs $50,000-and at least two of them are needed to create a connection.

"Upgrading infrastructure is time-consuming and costly," said Damon Kovelsky, an analyst at Newton, Mass.-based Meridien Research. "It is the last thing I see people doing right now. Is it something that should be done? Yes. Will it help expedite certain STP initiatives? Yes. Is there cash around for it? No."

According to Kovelsky, it will be another 12 months before Wall Street firms again have the cash they need for these kind of projects. The possibility of war with Iraq doesn't help matters, he added. "It brings up the price of gasoline and depresses the economy," he said.

According to Thompson, the market for 10-gigabit Ethernet will be mostly limited to early adopters through 2003. These will include some Wall Street firms and other financial services companies, high-end enterprises, education, and telecommunication service providers.

Since there's demand for it from many different sectors, Thompson said he expects prices to come down rapidly. He believes 10-gigabit Ethernet will hit the mainstream in 2004 and 2005.

Meanwhile, for those firms that plan to make an immediate move to 10-gigabit Ethernet-or that just want to test the waters-there are two basic approaches to the technology.

One is to upgrade current systems.

"We can sell you 10-gigabit technology today without requiring you to throw out everything you've purchased from us," said Marshall Eisenberg, director of evangelism and technology at San Jose, Calif.-based Foundry Networks.

The result won't be true 10-gigabit Ethernet, however-an upgraded chassis from Foundry Networks will run at eight gigabits, but the user doesn't have to replace the entire chassis.

"We get you 80 percent of the way there," Eisenberg said. "And you might not be using 10 gigabits' worth of capacity-you might be using only four gigabits' worth."

Even eight gigabits is enough to support one-gigabit desktop connections, he said.

The next generation of Foundry Network's Ethernet chassis will support true 10-gigabit Ethernet, he added.

"And when we come out with the new chassis, people will be able to move the old ones out to the edges of the network, and use the high-speed connections at the core of the network," he said.

The other approach to 10-gigabit Ethernet is to start fresh with a whole new system. Force10 Networks is betting on this area of the market.

Although several dozen start-ups were launched when one-gigabit Ethernet came out, only Force10 is on the cutting edge now. It had the first pure 10-gigabit product on the market.

"We are going after the early adopters, the innovators, the people trying to do something that they can't with existing platforms," said Force10's Mullaney.

"Today, 5 percent to 10 percent of the customers need a scalable, high-performance platform like Force10 has," he said, adding that the down economy is less of an obstacle to these customers. "They tend to look at downtimes as chances to double down. Now is the time to differentiate yourself from the competition. That's why they're innovative-they see ahead to where things need to go and use this as an opportunity to advance their competitiveness."

In particular, users that are doing brand-new network installations or re-architecting a network from the ground up might be interested in 10-gigabit Ethernet, he said.

Most existing Ethernet vendors don't have a 10-gigabit Ethernet product on the market yet. But both Foundry and Nortel Networks, for example, are planning to release one soon.

According to Nortel's Brand, Nortel Networks is just about to release a 10-gigabit product, which is already in pre-production and in a trial.

However, he added that Greenfield Installations-where there are no existing networks and engineers start with a clean slate-are very much in the minority of opportunities for 10-gigabit Ethernet.

For example, Nortel currently has a trial with financial customers with one-gigabit-to-10-gigabit aggregation, he said.

"We see people investing in upgrades to existing equipment," he said.

Meanwhile, Ray Milhem, senior director of product management at Extreme Networks, said his company has been shipping a pure 10-gigabit Ethernet product since June, as well as an upgrade version that can handle up to eight gigabits.

"A lot of our financial customers in the U.S. and Europe are currently using the eight-port gigabit Ethernet and are now in the stage of evaluating the 10-gigabit Ethernet," he said. "When they feel it's the right time, they will slot out the eight-port Ethernet and slot in the 10-gigabit Ethernet."

It won't happen overnight, he said, because it takes time to ensure that the new network configuration is fully reliable.

"From our experience with the financial industry, everybody is very cautious and conservative with the network backbone," he said. "Ultimately, whether it's a financial house or bank, Nasdaq or NYSE, you literally want zero downtime. They're very cautious or conservative when it comes to any changes in the network or any upgrade. They want to do as minimal impact to the operation as possible."