Gigabit Ethernet: Hope vs. Hype

Use of gigabit Ethernet in service provider networks could grow eightfold by 2005 -- with nearly 30 percent of revenues coming from 10-Gbit/s links. But Ethernet must become "carrier ready" to reach its full potential.

So says a recent report from Pioneer Consulting (see Report Sees Gig-E Growth). The firm says use of 1- and 10-Gbit/s Ethernet in access, metropolitan, and wide-area core networks will drive sales to carriers seeking lower-cost technologies to expand their facilities and offer new data-intensive services.

Industry sources bristle at Pioneer's projections, which estimate a gigabit Ethernet market of $44 billion by 2005. Even the most enthusiastic vendors in this market consider that figure excessive.

"The potential for metro optical Ethernet is large, but... I don't know what methodology they may have used," says Nan Chen, director of product marketing at Atrica Inc. and president of the Metro Ethernet Forum (MEF), an industry group.

Chen says it's not unrealistic to assume that the market for gigabit Ethernet in metro networks would double annually, reaching about $5 billion by 2005. But he says that estimate is contingent on vendors proving that Ethernet can perform reliably in carrier networks.

Pioneer Consulting's report concedes that carrier-class reliability and quality of service are still missing from the packet-driven, "best effort" world of Ethernet. And these features must be proven to service providers before the market can reach its full potential, the firm says.

Industry forces are trying to make this happen. At a meeting of the MEF last week, for instance, over 90 attendees from about 50 different companies reportedly agreed on a common method of matching Sonet's link recovery using MPLS (multiprotocol label switching) in Ethernet WANs.

"This was a breakthrough," says Chen. "We've developed a 50-millisecond protection model, when most people think Ethernet recovery takes 30 seconds."

Chen says the establishment of a protection scheme will be key to providing the value proposition carriers will require in order for the metro Ethernet market to take off as hoped.

Details of the spec need to be hammered out. Forum spokespeople say that a first draft spec is aimed for completion by February, with a final version due out in summer 2002.

The group also has started to define a QOS framework for Ethernet, within a set of predefined Ethernet services.

The Metro Ethernet Forum is one of two groups at the forefront of efforts at developing low-cost alternatives to ATM and Sonet/SDH for metro networks. The other group, the Resilient Packet Ring Alliance, has been pursuing its own standard within the Institute of Electrical and Electronics Engineers Inc. (IEEE). But industry sources say a range of issues, including higher cost, have brought RPR's goals into controversy, at least temporarily (see RPR: RIP?).

— Mary Jander, Senior Editor, Light Reading
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optigirl 12/4/2012 | 7:38:27 PM
re: Gigabit Ethernet: Hope vs. Hype So let me get this straight....

8 fold growth, 30% from 10GigE links but it will only happen when Ethernet reaches carrier grade reliability? I take it that the forecasters here believe that issue will get sorted out.

How many times have we heard the story that a technology is going to take off (but only after we handle that minor detail about meeting carrier standards)?

I find this "assumption" to be somewhat wishful in its thinking. We have been hearing about DWDM for 5 years now and there is not a whole lot going on in the metro space. Sonet is still king and if anyone expects Bell Companies to start deploying a "new" technology that quickly then they are not in tune with where the market is. GigE in the campus makes perfect sense but in the public network????? Has anyone at this company any appreciation for history?

Show us Fiber to the building and a lot of ESPs that have solid financial situations and maybe we should all take this seriously.

Sorry boys..... I hear better BS on Saturday nights out on the town!!!
lightmaster 12/4/2012 | 7:38:26 PM
re: Gigabit Ethernet: Hope vs. Hype Optigirl is being kind. There are so many violations of basic logic in these numbers that it boggles the mind. I would love for the author to address his methodolgy for coming up with these numbers. I suppose he interviewd the VP of marketing at YIPES?
gea 12/4/2012 | 7:38:25 PM
re: Gigabit Ethernet: Hope vs. Hype Optigirl you GO girl!

That same report claims that by 2005 the total worldwide market for Ethernet stuff will be like 145 BILLION. After talking to my Wall Street buddies, my suspicions on this are confirmed: that number only makes sense if just about every interface on every piece of gear becomes Ethernet and SONET equipment sales magically turn into Ethernet. Metro Ethernet is about $350 million this year, SONET is $5.5 BILLION. Could it be there's good reasons for that? This Pioneer consulting read a lot of marketing hype about Ethernet vs SONET and never got past the surface.

Look--my company makes Ethernet stuff for metro environments, and I know Ethernet's got a long way to go. All this silly talk about ethernet being cheaper is based on the idea of taking a $300 switch out of a computer room, sticking it in a CO and thinking that's going to be fine! Ethernet has some real advantages that are not yet easy to come by in the SONET domain, but there's nothing inherent about that, and that is already changing.

Just take a look at the price of LR transceivers--the GbE transceiver price is the same as an OC-48 transceiver price now, but per bit that's twice the cost! (ie, GbE is about half the bit rate of OC-48.) As GbE comes to be deployed in the service providers networks, there's no inherent reason SONET prices can't fall down dramatically (while Ethernet prices for Metro rise as Ethernet companies learn what it means to build a carrier-grade switch).

In the end, Ethernet's going to proliferate, but its not going to kill SONET any time soon. Meanwhile, SONET and Ethernet will continue to merge on some fronts (like 10GbE...I predict that will trickle down to a 2.5GbE with SONET framing in the near future).

So...Fiber-r-Us...let's hear your spiel...
nevermind 12/4/2012 | 7:38:22 PM
re: Gigabit Ethernet: Hope vs. Hype These kind of ridiculous growth projections and hype are what led us to the recent collaspe. I figured the cycle would repeat but I also figured that it would take a year or two before it started again.

poster 12/4/2012 | 7:38:21 PM
re: Gigabit Ethernet: Hope vs. Hype I have to agree with Optigirl on this one. Once again: time for a reality check people! The hype-meter is screaming here. agreed that there are many inefficiencies in the current solutions (SONET) and that these technologies, and the way they are being implemented into some next-gen gear, are evlolving rapidly to solve some of inefficiencies. (particularly 10GbE) but the numbers and projections these people are talking about are pure hype. they're talking broad deployment into the public network - it simply doens't happen like that! think about how long it takes for something to be deployed on wide scale in the public network. SONET is just peaking now, maybe last year, in the height of the biggest all time network build out. that technology has been around for 15+ years. RBOCs and the largest telcos, which are the only way to justify these numbers, just don't operate like that. again, Optigirl's statement about DWDM is case in point.

fresh 12/4/2012 | 7:38:19 PM
re: Gigabit Ethernet: Hope vs. Hype Pioneer Consulting welcomes the attention focused on its new Gig-E market report.

We are convinced that Gig-E represents a sizeable market opportunity for equipment vendors -- even when the impacts of the current economic slump are factored in.

At the same time, we must sadly note the unconstructive tone of certain comments anonymously submitted. The anonymity of these comments strongly suggests the handiwork of rival market research firms or proponents of competitive technology. Accordingly, we urge readers to consider the source.

Douglas Peterson
Pioneer Consulting, LLC.
Tel. 617-424-5200
flanker 12/4/2012 | 7:38:19 PM
re: Gigabit Ethernet: Hope vs. Hype ...there's no inherent reason SONET prices can't fall down dramatically...

Yes, SONET card prices ARE dropping like a rock.
lightcreeping 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype For example?

Don't you believe that prices of all gear are falling? Have fallen? Vendors are still working through a glut of equipment.

l8tereader 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype We should be careful to discern between VALUE falling like a rock and the PRICE (where price equals the cost to produce) of an item ;-)
poster 12/4/2012 | 7:38:18 PM
re: Gigabit Ethernet: Hope vs. Hype Douglas, are you guys doing PR consulting for the Taliban? the logic here looks similar. broad, unsubstantiated claims which when challenged, you vehemently defend, then respond with accusations of infedels and declare a holy war.

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