Foundry Drops 10-GigE Prices

The expected price drops in 10-Gbit/s Ethernet are continuing, with Foundry Networks Inc. (Nasdaq: FDRY) trumping Cisco Systems Inc. (Nasdaq: CSCO) with a price of $2,500 per port (see Foundry Launches 10-Gig Products).

Foundry today announced it's shipping an eight-port stackable switch, the EdgeIron 8X10G, with a list price of roughly $20,000, not including optics. This lowers the base price of $5,000 per port that Cisco had achieved last year with a four-port module, and it's worlds away from the $20,000 or more attached to some 10-Gbit/s Ethernet ports early in 2003.

The hope is that lower prices will drive 10-Gbit/s Ethernet to the mainstream more quickly. "The cost per-port has come down enough that it is no longer a barrier to deployment. Companies want to put a network in that will last for five to ten years," says Zeus Kerravala, vice president of enterprise infrastructure at The Yankee Group.

Cisco's four-port module gave it a serious market-share boost, knocking Foundry out of the top spot, according to Synergy Research Group Inc. (see Cisco Bombs 10-GigE Pricing). Foundry could enjoy the same kind of jump, but a lot is going to depend on whether the mainstream needs eight 10-Gbit/s Ethernet ports.

"The question is how much demand their customers have for something of that high density," says Synergy analyst Joshua Johnson. "Then again, they sell to Japanese service providers and the Department of Defense," both of which use high volumes of high-speed connections, he notes.Cisco declined to comment for this story.

Foundry is hoping the $2,500-per-port tag will convert a good share of the mainstream to 10-Gbit/s Ethernet. Officials also expect to see 10-Gbit/s ports appear at the network edge, not just at the enterprise core, and the new price tag is intended to win over that market, says Ken Cheng, vice president of Foundry's switching and routing business unit.

The price is likely to continue declining but not as drastically as in the past 18 months. "I think 10-Gbit/s Ethernet is going to enjoy some price premium for a while," Cheng says. "We think $2,500 [per port] is going to drive the 10-Gbit/s market to the mainstream."

"I don't think the price is going to fall as fast as Gigabit Ethernet did," Johnson says. "We won't see $200 or $300 per port for four to five years."

But, as the 10-Gbit/s price war starts to hot up, Kerravala warned that users should think beyond the initial acquisition costs: "Total cost of ownership has a lot to do with things like training and operational issues. From the research that we have done, the hardware cost of running the network is less than 20 percent."Foundry also announced a module with eight ports of 10-Gbit/s Ethernet for its BigIron MG8 switch. The module, set to be available in January, lists for $50,000, or roughly $6,250 per port.

Craig Matsumoto, Senior Editor, Light Reading and James Rogers, Site Editor, Next-gen Data Center Forum

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