Technology | Media | Telecommunications

Friday, October 31, 2008

Demand Drives Ongoing Gigabit Investment

The 10 Gigabit (10G) networking system market is already big and growing fast, on target to reach nearly $9.5 billion worldwide in 2008, according to the latest market study by Infonetics Research.

Their report, which tracks 10G, 40G, 100G optical and Ethernet ports, plus revenue on various types of service provider and enterprise systems, shows that despite the economic downturn the 10G market is thriving and will continue to thrive for many years to come.

Now 40G is increasing rapidly, and 100G should begin soon and take off by 2013.

"A majority of service providers we've spoken to are expecting to invest in 40G until the 100G market is up and running; some providers are hoping to skip the 40G phase altogether, but we don't see that being a viable option, as growing traffic demands are outstripping current capacities and 100G won't reach reasonable price points until about 2012 or 2013, said principal analyst and co-founder of Infonetics, Michael Howard.

"When 100G Ethernet arrives, it'll be the next big thing and the most important, because it will last to at least 2025, solving traffic problems for a very long time."

Co-author of the report Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research, added, "As corporate applications get more and more bandwidth intensive and enterprises centralize their resources, a tremendous strain is being put on their networks."

"In our latest user study, increasing network capacity was named by network managers as their number one initiative -- it's no surprise then that shipments of 10G ports are going through the roof. Ethernet switch-based 10G port shipments, for example, grew 140 percent in 2007. Growth should remain healthy for years to come, as this is an area where buyers are putting their money where their mouths are."

Highlights from the Infonetics report include:

- 40G revenue is forecast to increase at a fast clip, with a compound annual growth rate (CAGR) of 59 percent from 2007 to 2011.

- In 2008 the average revenue per 10G Ethernet port on service provider equipment is more than 10 times that of enterprise equipment.

- The number of 10G, 40G, and 100G ports shipping on enterprise and service provider equipment will jump from over 1 million in 2007 to 7.4 million in 2011, with 100G making its small debut in 2009.