The 10GBASE-T standard was finalized some four years ago now, but, as I’ve mentioned before, equipment using these ports is really just starting to be deployed in actual networks. The main reason being that you couldn’t get a switch with these ports on it. So early implementations of 10G are 10GBASE-SR, 10GBASE-LR or 10GBASE-LRM, with the vast majority now being the SR. But now that switch manufacturers the likes of Blade Networks, Cisco and Extreme Networks have products offering up to 24 ports of 10GBASE-T, the market dynamics may change.
With Ethernet, history tends to repeat itself so let’s take a minute to review what happened at Gigabit. Early products were 1000BASE-CX, SX and LX because the 100m 1000BASE-T had not yet been standardized. But, as soon as it was and the switch manufacturers started adopting it, it took over the shorter-reach Gigabit Ethernet market. In fact, it still dominates today.
So, why would 10GBASE-T be any different? Well, my belief is that eventually, it won’t. Even though data center managers concerns have shifted from space, to power availability per rack and cooling hot spots, when they see the price tag difference between SR and T (still about 2:1 per installed port), it causes them to pause and rethink the T scenario. So although data center managers want to reduce their headaches with fat CAT6A cables, most are still not willing to pay that much more for the optical solution until they have to because of distances. So even though the T ports may push electricity bills up, for most, the increase isn’t significant enough to justify the up-front cost of SR.
Showing posts with label Blade Networks. Show all posts
Showing posts with label Blade Networks. Show all posts
Thursday, September 16, 2010
Monday, August 23, 2010
When a Standard Isn’t Exactly a Standard
I’ve noted in a couple of posts now that equipment manufacturers charge a lot more for optical modules they sell to end users than what they actually pay for them from transceiver suppliers. Considering the pains OEMs go through to “qualify” their vendors, a healthy markup in the early stages of a new product adoption can be warranted. But, I’m not so sure keeping it at more than 5x the price five years down the road can be justified. And is it sustainable? Some transceiver manufacturers sell products at gross margins in the 20-percent range, while their biggest customers (OEMs) enjoy more like 40 percent.
And guess what, there’s not much the suppliers can do. It is well known that Cisco, Brocade and others purchase modules, and now SFP+ direct-attach copper cables, from well-known suppliers and resell them at much higher prices. And if I’m an end user, I MUST buy these from OEM or their designate or my equipment won’t work. These devices have EEPROMs that can be programmed with what some call a “magic key” that only allow them to work with specific equipment. So the OEM now has a captive market for modules and copper cables going into their equipment, and so they can pretty much charge what they want to. If I try to use a “standard” module or cable assembly – one that is compliant to the specification – it will not work unless it has this “magic key.”
I’ve experienced this first hand. I had a brand new HP ProCurve Gigabit Ethernet switch that I wanted to use for some cable testing I was doing. I had dozens of SFP modules from all of the top transceiver manufacturers, but none of them would work in the switch. I called HP and they said, “You have to buy the HP mini-GBIC.” Well, I knew that wasn’t exactly true. I didn’t really want to pay the $400+ each for four more SFPs that I didn’t need so I tried to work through my contacts at HP to get a firmware patch so I could use my existing devices. Long story short, I never did get that patch and ended up doing my testing with SMC switches instead.
Prime example of when an open standard is not so open. Will data center managers be able to sustain this when they have to move equipment around and need different modules or cable assemblies? Are the OEMs thinking about the aftermarket and the fact that data center managers are used to going to distributors to get these items? And are OEMs going to continue to gouge end users and potentially cripple their suppliers?
One added note - there are at least two equipment manufacturers that I know of that support an open standard: Blade Networks and Extreme Networks. While they will both supply the modules and cable assemblies, they don't lock out other standards-compliant parts that customers may want to use.
And guess what, there’s not much the suppliers can do. It is well known that Cisco, Brocade and others purchase modules, and now SFP+ direct-attach copper cables, from well-known suppliers and resell them at much higher prices. And if I’m an end user, I MUST buy these from OEM or their designate or my equipment won’t work. These devices have EEPROMs that can be programmed with what some call a “magic key” that only allow them to work with specific equipment. So the OEM now has a captive market for modules and copper cables going into their equipment, and so they can pretty much charge what they want to. If I try to use a “standard” module or cable assembly – one that is compliant to the specification – it will not work unless it has this “magic key.”
I’ve experienced this first hand. I had a brand new HP ProCurve Gigabit Ethernet switch that I wanted to use for some cable testing I was doing. I had dozens of SFP modules from all of the top transceiver manufacturers, but none of them would work in the switch. I called HP and they said, “You have to buy the HP mini-GBIC.” Well, I knew that wasn’t exactly true. I didn’t really want to pay the $400+ each for four more SFPs that I didn’t need so I tried to work through my contacts at HP to get a firmware patch so I could use my existing devices. Long story short, I never did get that patch and ended up doing my testing with SMC switches instead.
Prime example of when an open standard is not so open. Will data center managers be able to sustain this when they have to move equipment around and need different modules or cable assemblies? Are the OEMs thinking about the aftermarket and the fact that data center managers are used to going to distributors to get these items? And are OEMs going to continue to gouge end users and potentially cripple their suppliers?
One added note - there are at least two equipment manufacturers that I know of that support an open standard: Blade Networks and Extreme Networks. While they will both supply the modules and cable assemblies, they don't lock out other standards-compliant parts that customers may want to use.
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