Lower prices boosting 10 Gig Ethernet according to HeavyReading

The 10-Gbit/s Ethernet market could be poised for a growth spurt, as prices are getting down to the critical level to kick up some serious demand, according to the latest Heavy Reading report, available at here. The LightReading report discussing the same is available here.

It notes that the chip technology prices are one-tenth what they were in the first generation of 10-Gbit/s Ethernet which has helped boost the volume of 10 Gig Ethernet sales. Modules are lowering systems prices by getting smaller. The industry started with the 300-pin multisource agreement (MSA) and has been moving through smaller module generations since -- to Xenpak, then X2, and eventually XFP. Vendors are already working on the next step beyond the XFP transceiver, called SFP+.

Prices for 10-Gbit/s ports have recently dropped to less than $10,000 per uplink -- which, with 48-port switches on the market, translates to less than $200 per user.

Bellsouth using Hettheras equipment for 45 Mbps Ethernet over Copper

BellSouth will use Hatteras Networks Ethernet service edge platform to deliver up to 45 Mbps of symmetrical Ethernet service over copper. It is expected BellSouth to move its business outside its normal customer base by delivering leased Etehrnet lines on copper, and thus have small businesses as their customers.

10 Gig Ethernet High Priority for Enterprises according to TheInfoPro

10 Gig Ethernet technology has emerged in TheInfoPro's most recent studies as a top priority among networking professionals for 2006, based on hundreds of one-on-one interviews with networking decision makers. The technology is considered to be important across many domains inside the IT organization due in large part to data center consolidation, server virtualization and potentially networked storage. Some results of the study are availebale here.

Update from IEEE 802.3 Plenary last week

The IEEE 802.3 plenary was help last week (July 16-21) at San Diego. A brief update on some of the important achievments at the meeting:

1) A proposal to study higher speed Ethernet (beyong 10 Gig and possibly 40 Gig or 100 Gig) was voted and accepted. A lightreading report on the same is available here. The report mentions that a standard may be expected in 3 years from now.

2) The Project Authorization Request (PAR) and Five Criteria Responses submitted by the 10 Gig Ethernet PON study group has been accepted. The next step is for the standards board to approve the creation of a task force, which if created is expected to meet in September (Date and Venue to be decided).

Quake signal processing technology to reduce 10 Gig Ethernet cost

Quake Technologies today announced the availability of the QT2035S, an integrated physical layer IC for all 10 Gigabit Ethernet (10GE) applications. To quote Mitch Kahn, Quake's vice president of marketing:

Today, the wholesale cost for a typical XFP module for short-reach 10G Ethernet is approximately $350. Using Quake's new QT2035S and SFP+ technology, the cost of a module for this same reach can be reduced to below $100. At this new price point, 10G Ethernet becomes very compelling for a range of high-volume applications

PMC-Sierra posts weak projection on EPON growth

PMC-Sierra's stock was hit by 25% today, after it projected lesser growth in EPON revenues, one of the key technologies it had pinned its growth on. PMC-Sierra had bought Passave for $300 million last quarter. The EPON revenues in this quarter are $16 million, while the expected revenues in next quarter are $13 million.

According to a LightReading report available here, the problems seems to be from Japan, where NTT wants to use fewer Optical Line Terminals (OLTs). NTT has been deploying roughly one OLT per four subscribers but wants to use a one-to-eight ratio -- resulting in fewer OLTs in the short term. OLTs being the more expensive chipset compared to ONUs, yields better revenue and gross margins.

Passave's revenues have bounced around in the range of $10 million to $16 million per quarter for most of the past two years. So even though this past quarter was an all-time high, Passave doesn't seem to be showing the straight-line growth path investors were hoping for.

It seems that part of the problems in the slow growth of EPON is high competition (as many as three other startups: Teknovus, Immenstar, Centillium), and a very limited market in Korea and Japan. Because these chipsets are sold to equipment vendors and resellers, may lead to lesser gross margins.

Given that, the price of $300 million that PMC-Sierra paid seems to be sky high.

Alloptic Aims for Latin American Market

Alloptic announced that they have signed a reseller agreement with Datagrama Comunicaciones of Costa Rica for its EPON chipsets. Datagrama Comunicaciones serves the Central American markets with broad expertise in the telecommunications, data communications, and security markets. It is beleieved that AllOptic is targeting the Latin American market where broadband access deployments have yet to evolve.

Yankee Group Research shows Ethernet growing rapidly in Asia Pacific

According to "Big Bandwidth, Low Prices: Asia's Speed Demons Review", published by the Yankee Group, several factors are driving the boom of the Asia-Pacific wide-area Ethernet market including surging bandwidth requirements, the ability to provision bandwidth on-demand and a gradual network migration. Asia-Pacific is the second largest market after Europe in terms of revenue from Ethernet services, totaling $676.5 million in 2005. Most service providers in Asia-Pacific offer their Ethernet services over an MPLS-based IP VPN network. Although Metro Ethernet is gaining momentum in the corporate networking arena, the capability to offer enhanced manageability and service performance remains critical for service providers to stand out and win enterprise business.

Teknovus EPON chips being used by KT too

After last weeks' announcement by Dasan Networks, that its equipment with PMC-Sierra EPON chips would be deployed by Korea Telecom (KT), today Samsung announced that its FTTH equipment carrying Teknovus EPON chips would be deployed in large volumes across Korea too. So it looks like KT will be going with multiple vendors for its deployments. Korea is definitelty the next biggest EPON market after Japan, so these developments will be great for Teknovus.

Ethernet Growth to drive 10 Gig optical industry

An interesting analysist report by Communications Industry Researchers (CIR), (news analysis available here)claims that manufacturers of optical modules based on semiconductor lasers and modulators should witness a boom in demand with rapid deployment of 10 Gigabit Ethernet from 2008 onwards. According to the forecasters at Communications Industry Researchers (CIR), the main reason behind the expected boom will be the deployment of products for use in short-range 10 Gb/s applications.

Purchase details of the same report are available here.

PMC-Sierra's EPON Solution to be deployed by Dasan Networks

PMC-Sierra announced in a press release that its EPON chips would be designed into Dasan's FTTH equipment to be used by Korea Telecom (KT) for volume deployment in Korea's FTTH network rollout. KT is expected to begin volume deployments in the third quarter of this year. This seems to be a great new market, as PMC-Sierra (Passave) already carries volume deployments by NTT in Japan. Prease release is available at

http://phx.corporate-ir.net/phoenix.zhtml?c=74533&p=irol-newsArticle&ID=881130

Immenstar introduces dual mode GPON/EPON

Immenstar, which recently came out of stealth mode to introduce EPON chips has now introduced a chipset that may operate in dual GPON/EPON mode. GPON and EPON are two different blends of the Passive Optical Network (PON). They differ in the technology used to encapsulate frames, while EPON uses the Ethernet, GPON uses the Generic Framing Procedure (GFP). While EPON has the advantages of blending in easily with the universal Ethernet ports (such as in LANs), GPON currently has a higher bit-rate in current operations and better operational control mechanisms.

I am not very sure of the motivation behind a dual mode GPON/EPON chipset, since the two different technologies have been growing in different markets. While the EPON has been strongly growing in the Asia-Pacific, the GPON has been growing in North America. It also seems unlikely that an operator would like to move to a GPON solution once he has chosen to go with EPON and vice-versa. May be the benefit it is in manufacturing ease, because a single product may now cater to both markets, and thus reduce the cumulative costs of operations, compared to having two differnt product lines. Any comments from readers would be great.

BellSouth diversifies Metro Ethernet Portfolio

BellSouth announced today that it is expanding its Metro Ethernet Service to include mid-band speed options of 2Mbps, 4Mbps and 8Mbps. BellSouth Metro Ethernet Service currently offers previously available data transport speeds of 10Mbps, 20Mbps, 50Mbps, 100Mbps, 250Mbps, 500Mbps and 1000Mbps.

Article on 10 Gig Ethernet

A nice article on the importance and the future of 10 Gig Ethernet is available here. The author expects 2 milion 10 Gig Ethernet ports to be shipped in 2010, as the cost per port decreases, and the dmad of higher bandwidth in enterprises increases.