Ethernet Gets More Expensive

Ethernet Gets More Expensive
Price of networking equipment rises for the first time in several
years, study shows.

Bryan Betts, Techworld.com
Monday, August 23, 2004

The price of Ethernet has risen for the first time in several years
even though people are buying more switches, says market researcher
Dell'Oro Group. The company says the average price of an Ethernet
switch port has risen to $96, with Fast Ethernet around $50 per port
and Gigabit around $200.

"Over time prices have always gone down, but for the first half of
2004 the average price of a Fast Ethernet port rose by a few percent,"
says Seamus Crehan, Dell'Oro's director of Ethernet switch research.

"There's a two-pronged upgrade going on," he says. "There's the shift
to higher speeds as the prices of the different speeds converge, and
the other prong is there's more intelligence going into the
switch--that affects all speeds but it affects Fast Ethernet the
most."

More For Your Money?

Crehan warns that while switch buyers are therefore getting more for
their money, for example Power-over-Ethernet and Layer 3/Layer 4
capabilities, there are also serious management challenges ahead as
the intelligence in the network moves from the core to the edge.

"It used to be the IT manager would try to centralize the complexity,
but we are starting to see enterprises roll out IP telephony and
wireless LANs, and those applications drive the need for more
feature-rich switches, especially on the client side," he says.

He adds that on the one hand, convergence means that in the long term
there will be less to manage, but that on the other, the actual
management will be more complex. And in the interim, both converged
and non-converged networks must be managed side by side.

Dell'Oro figures show strong demand for Ethernet switches during the
first half of 2004, thanks to pent-up demand. Crehan adds that he
expects Ethernet switch pricing to fall again in the future.

http://www.pcworld.com/news/article/...082404X,00.asp


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