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Optical/IP

Cisco Bombs 10-GigE Pricing

The 10-Gbit/s Ethernet market saw a massive shift in the fourth quarter of 2003, with Cisco Systems Inc. (Nasdaq: CSCO) regaining the lead from Foundry Networks Inc. (Nasdaq: FDRY) as prices nose-dived, according to research reports released this week.

The reason? A four-port line card, first announced in March, finally began shipping, and it was a hit (see Cisco Takes On 10 GigE Competition).

"The average price [per port] in the third quarter was about $23,800. The Cisco piece that sold so well was a $20,000 module that had four 10-Gbit/s ports on it," says Joshua Johnson, analyst with Synergy Research Group Inc. Cisco sold a lot of the four-port cards, enough to overtake Foundry in 10-Gbit/s Ethernet revenues for the quarter, according to Synergy.

Similarly, Dell'Oro Group noted a 60 percent decline in 10-Gbit/s Ethernet average prices and a quadrupling of port shipments during the quarter. Prices have fallen by more than $30,000 per port since the end of 2002, Dell'Oro reported. (See Dell'Oro: 10 Gbit/s Prices Slump.)

Cisco began the quarter trailing Foundry in both port shipments and revenues for 10-Gbit/s Ethernet switches. By the end of the quarter, Cisco had beaten out Foundry in revenues and utterly dominated in terms of ports shipped:

Table 1: 10GE Switches, Market Share by Revenues
4Q03 3Q03
Cisco
46.0%
30.9%
Foundry
38.2%
49.8%
Force10
10.0%
7.1%
Source: Synergy Research Group Inc.


Table 2: 10GE Switches, Market Share by Ports Shipped
4Q03 3Q03
Cisco
76.1%
37.7%
Foundry
13.1%
43.1%
Force10
6.2%
9.6%
Source: Synergy Research Group Inc.




Cisco's four-port card is hardly perfect. The ports can't all run at line speed, and the card has less functionality than its two-port sibling -- factors Cisco disclosed in March. One competitor noted that it also requires a daughter card that tacks $7,000 to $8,000 to the price, although that's still lower than typical 10-Gbit/s offerings.

Other companies have four-port offerings, naturally. Foundry officials say they've got such a line card shipping, albeit at a price higher than Cisco's; and Force10 Networks Inc. has been developing a four-port card as well.

Speaking of which -- both research firms show Force10 making a strong showing, materializing from zero-revenue territory at the beginning of the year. Synergy's numbers show Force10 in third place, passing Extreme Networks Inc. (Nasdaq: EXTR) in market share by both revenues and ports shipped.

Extreme's lost ground could be temporary. "Their customer base was waiting for the BlackDiamond 10K to come out, and that didn't ship until late in the quarter," Johnson says. "We'll see sort of a comeback next quarter." (See Extreme Touts BlackDiamond 10K, Extreme Expects Revenue Dip, and Extreme Posts Q2 Loss.)

Dell'Oro shows Extreme in third place by ports shipped, but it should be noted that the two reports aren't equivalent. Synergy's tracks LAN switches only, while Dell'Oro is looking at Ethernet shipments in all contexts.

The overall LAN switch market fell 3 percent to $11.2 billion in 2003, according to Synergy, but that's no reason to panic, Johnson says. "It's really a constant level of spending," he says, noting that overall port shipments grew by 17 percent in 2003.

— Craig Matsumoto, Senior Editor, Light Reading
icenine 12/5/2012 | 2:26:53 AM
re: Cisco Bombs 10-GigE Pricing 10GE ports are taking off, but what kind? XENPAK, X2 or XFP?

SR/LR/ER/LX4/CX4?

Or is Cisco shipping the Razors w/o the blades?
Abby 12/5/2012 | 2:26:50 AM
re: Cisco Bombs 10-GigE Pricing Q4 earnings announcements went bad for both.

Classic Prisoners' Dilemma!

;)
pbrannelly 12/5/2012 | 2:26:47 AM
re: Cisco Bombs 10-GigE Pricing A Cisco card that doesn't run at line speed?????
There's a shocker!
gotman 12/5/2012 | 2:26:45 AM
re: Cisco Bombs 10-GigE Pricing pbrannelly

The ports do linerate, but not together. 4 ports, single 20gig asic for switching silicon. Does both v4 & v6.

gm
sgamble 12/5/2012 | 2:26:40 AM
re: Cisco Bombs 10-GigE Pricing If you want to run the 4x10G on Foundry NI/BI you are SOL - 2x10 only. You must buy the Mucho which is now shipping - AKA Forklift. None of the line-cards you invested in the NI/BI will work in the Mucho. Problem! You can only get the 2x10G for NI and the slot only runs at 8Gig (problem many vendors have). Also, it is the policy of Foundry to not offer upgrade paths for NI/BI customers unless you beg (something I plan to start doing perhaps) since I have a lot of $$$ in NI1500s with JetCore line cards.

How does it work on the Cisco 720? Just a sup update or more? Non-line rate... Surprise! Also is the slot capacity 20Gig or 40Gig (real math folks, cisco staff dont answer!).

Doesnt the Mariner (Extreme) only run 8Gig/slot? Comparing F10 to Extreme is a little unfair. I understand you are strictly talking about 10G but at least Extreme has paying customers that arent just research sites. What is this other box from Extreme. To be honest, I havent kept up with Extreme because the writing was sort of on the wall with these guys...

I would love for someone to pickup F10 'cause their gear, on paper, sounds very good. But I wont touch them in my Metro until they are beefed up with a big player. But the architecture and features sound great. Team up with someone!


Steve.
ntwkeng 12/5/2012 | 2:26:22 AM
re: Cisco Bombs 10-GigE Pricing One thing I forgot to state- the Mucho Grande platform will do Wire Rate IPv4 at 64-byte frames on all 4 10GbE interfaces on each line card concurrently.

ntwkeng 12/5/2012 | 2:26:22 AM
re: Cisco Bombs 10-GigE Pricing Actually, no offense, but both of the previous posts are inaccurate.

Foundry BigIron and NetIron has a single 8GbE connection to the backplane. So the 2x10GbE ports on it are oversubscribed by a 20:8 or 5:1 ratio.

On the Cisco 6500 with Supervisor 720 there is a 40GbE Full Duplex connection to each linecard. (in reality it is 2x 20GbE Fabric Channels). The 4x10GbE module uses both Fabric Channels. The 'cannot run at line rate' is due to fabric header information that tells the switch fabric which module and port to forward the frame to.

It was tested by EANTC at http://www.eantc.com/press/pre...

subliminalsandwich 12/5/2012 | 2:26:19 AM
re: Cisco Bombs 10-GigE Pricing "I would love for someone to pickup F10 'cause their gear, on paper, sounds very good. But I wont touch them in my Metro until they are beefed up with a big player. But the architecture and features sound great. Team up with someone!"

They've actually already won some big players. I wouldn't be suprised if they started announcing some of those wins this year.
subliminalsandwich 12/5/2012 | 2:26:13 AM
re: Cisco Bombs 10-GigE Pricing "Been following them for a while- they were 20Gb per slot, then 24, now they are claiming 40 or 48, but I think they will need to upgrade either the linecards, switch fabrics, or Route Processors one more time to get there."

Been at 48 for awhile now with their current architecture (going back to mid or maybe early 2003). They don't yet have the linecards with the portcount to take advantage of the 48 though.

"Their initial product did not support multicast or jumbo frames, making it a no-op for me."

Initially, yeah. For awhile now, no. This was before any competitor even (pre)announced a new switch.
ntwkeng 12/5/2012 | 2:26:13 AM
re: Cisco Bombs 10-GigE Pricing On paper is not a network though. They have gone through so many hardware revisions I am a tad scared. Been following them for a while- they were 20Gb per slot, then 24, now they are claiming 40 or 48, but I think they will need to upgrade either the linecards, switch fabrics, or Route Processors one more time to get there.
Their initial product did not support multicast or jumbo frames, making it a no-op for me.

I do like the 3-processor architecture they have done, but on a VxWorks based OS I am not sure how much it is going to help me...
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