Cisco Takes On 10 GigE Competition

Cisco's new 10 GigE announcement matches competitors on performance and beats them on pricing

March 31, 2003

6 Min Read
Cisco Takes On 10 GigE Competition

Cisco Systems Inc. (Nasdaq: CSCO) has upped the ante in the 10-Gbit/s Ethernet race. Today the company announced three key enhancements to its existing Catalyst 6500, making it the leader in terms of both price and performance in 10-Gbit/s Ethernet switching (see Cisco Boosts Catalyst 6500).

Cisco already offers a one-port 10-Gbit/s Ethernet module on the Catalyst 6500, but, like most of its switching competitors, it didn’t offer true line-rate performance on its first-generation product. And because the density was so low, it was wildly expensive. But with today’s announcement all of that is changing.

“I’m not surprised by the new enhancements,” says Zeus Kerravala, vice president of enterprise infrastructure at Yankee Group. “But I am surprised that they were able to get all this functionality together so quickly. I wasn’t expecting them to announce anything until the end of the year.”

An important key to the new Cisco 10-Gbit/s story is the Supervisor Engine 720, which, as its name suggests, offers 720-Gbit/s worth of switching capacity. The previous Supervisor Engine only offers 256 Gbit/s. But in addition to more capacity, Cisco has also integrated the switch fabric into the Supervisor module, making it both more compact and more affordable. The 256-Gbit/s Supervisor Engine lists for about $35,000 and requires a $10,500 switch fabric. The new 720-Gbit/s Supervisor Engine lists for $28,000 -- and that includes the switch fabric.

In addition to line-rate services like IPv4, quality of service (QOS), and access control list lookup, the new Supervisor Engine also provides a number of hardware-accelerated services including IPv6, Multiprotocol Label Switching (MPLS), network address translation (NAT), and General Routing Encapsulation. It also forwards packets at 400 million packets per second, almost double what the 256-Mbit/s Engine offers.

While the 720 Supervisor Engine makes it possible to handle line-rate 10-Gbit/s switching on every port, Cisco has also improved the density, performance, and price of the actual 10-Gbit/s interfaces. The company has developed two separate modules to address two markets. The two-port 10-Gbit/s module is targeted at the service provider metro Ethernet market, while the four-port 10-Gbit/s module is squarely targeted at data-center and research applications.

As for the two-port 10-Gbit/s solution: With support for 16 QOS queues and 150 millisecond buffers, it also offers full line-rate, non-blocking switching of Ethernet packets. The module is specifically designed for metro Ethernet applications, although it can be used alongside the ONS 15808 DWDM transport device to provide 2,000km transmission of optical Ethernet without regeneration, allowing service providers to extend the reach of their metro Ethernet networks without using Sonet technology.

Experts expect service provider metro networks to eventually be the sweet spot for 10-Gbit/s Ethernet, as more Ethernet deployments to homes and businesses will require more traffic aggregation.

“Large enterprise customers are already demanding metro Ethernet services,” says Michael Kennedy, managing partner at Network Strategy Partners LLC. “Carriers are starting to see the market opportunity.”

But the uptake in the metro is expected to be slow. In the meantime, both large enterprises aggregating traffic on campus networks and large data centers aggregating clusters of high-performance services are also expected to move to 10 Gbit/s. Cisco has a solution here, too. In fact, it is the first vendor to announce a four-port 10-Gbit/s Ethernet module specifically designed for this market (see 10-Gigabit Ethernet).

Force10 Networks Inc., a startup specializing in 10 Gbit/s for research and data-center applications, has revealed plans to offer a four-port card, but hasn’t announced it yet.

Doug Gourlay, Cisco's senior manager of product marketing for the Catalyst 6500, admits that the four-port module doesn’t perform at line rate. He says it operates at about 98 percent of its total capacity, but he claims this is sufficient for data-center applications.

Cisco is also competing on price, an unusual twist for the networking giant. The base price for the two-port 10-Gbit/s Ethernet module is $60,000 or about $30,000 per port. For the four-port module, which actually has less functionality than the two-port, the list price is $20,000 or about $5,000 per base module. But where the company has really pushed the envelope on price is in the optics. It is offering 1310nm optics, which can reach about 10 kilometers, for $4,000. The longer-reach 1550nm optics, which reach about 40 km, are $12,000. Previously, Cisco’s optics listed anywhere between $30,000 and $40,000. The big difference here is that Cisco is now using the modular Xenpak format rather than custom optics.

All told, Cisco is able to offer 10-Gbit/s interfaces for less than $10,000 per port. This is an amazing feat, considering that Force10 hit the low price mark at $17,000 per port (see Force10 Slashes 10-GigE Pricing). The cut in prices, along with the enhanced functionality, spells trouble for Cisco competitors. Startup Force10 is likely to be the hardest hit.

“Clearly Cisco has made a leap in performance and pricing,” says Yankee's Kerravala. “I can’t say there is much of a reason to even go with Force10 now. It’s ironic, but Force10 probably helped escalate the development of 10 Gbit/s. But they themselves may never benefit from it.”

Companies like Extreme Networks Inc. (Nasdaq: EXTR), Riverstone Networks Inc. (Nasdaq: RSTN), and Foundry Networks Inc. (Nasdaq: FDRY) will also be affected. Kerravala sees Foundry, with its soon-to-be-released platform, code-named Mucho Grande, as the second supplier in the high-end data-center switching market behind Cisco (see Foundry Intros Next-Gen 10-Gig Ethernet ). But if the 3Com Corp. (Nasdaq: COMS) / Huawei Technologies Co. Ltd. joint venture comes out with a 10-Gbit/s solution, it could win the second supplier seat (see 3Com Taps Huawei in Enterprise Battle).

As for the metro market, Riverstone and Extreme are likely to take the brunt. Both companies are expected to announce new 10-Gbit/s platforms in the first half of this year. While these companies have made some traction in Asia selling metro Ethernet gear, neither company has been able to crack the incumbent regional Bell operators in the U.S. But Cisco already has. Verizon Communications Inc. (NYSE: VZ) has deployed hundreds of Catalyst 6500s in its internal network as well as its metro networks. Cisco also has a strategic relationship with SBC Communications Inc. (NYSE: SBC) (see Cisco and SBC: What's the Big Deal?). It’s very likely that these RBOCs will look toward Cisco first for their 10-Gbit/s Ethernet needs.

“Cisco has a much better end-to-end story through the metro than any other company,” says Kerravala. “They’re also matching [competitors] on price, which will hurt.”

— Marguerite Reardon, Senior Editor, Light Reading

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