Market Implications of Approval of IEEE 40/100G Standard

By Lisa A. Huff, CDCP, Principal Analyst, Discerning Analytics, LLC

It's been nearly five years since the work on 40/100G IEEE (IEEE 802.3ba) standard started and it is finally complete. What does this mean to the Ethernet networking industry? Well, really not much to start, even though you'll hear otherwise from all of the vendors.

For all but a few companies like Google, Facebook or the Amsterdam Internet Exchange, the truth is that the networking community has barely tapped 10-Gigabit Ethernet’s potential. Most enterprise networks still consist of 100Mbps connections to the desktop with workgroup switch Gigabit uplinks to corporate data centers. Within the data center you now see more 10G connections, but for the vast majority of businesses these are still scarce.

So really what the release of the new standard means is that the last data rate will start to see more sales because there is actually an upgrade path now available. And while Google will start to deploy 40G as soon as it can, 10G will be attractive for smaller companies.

But what does this have to do with optical components? What was found in a recent study I conducted for CIR was that 10GBASE-SR seems to be the most cost-effective 10G solution. It uses 850nm VCSEL-based transceivers and laser-optimized multi-mode fiber. But you would think that 10GBASE-T (copper) would be less expensive right? Not so if you consider that it still has issues with actually supporting 100m and consumes close to five times the power of the 10GBASE-SR modules.