The battle of the backbones

Which backbone will ultimately drive corporate data? ATM with its technical maturity and multimedia capabilities? Or Gigabit Ethernet with its simplicity, low cost, and flexibility?


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When two companies merged to form consulting and accounting firm Eide Bailly LLP in May 1998, the new management team mapped out plans to move employees into new corporate headquarters and to move up to a higher speed network.

The two firms had relied on 16Mbps token ring and 10Mbps Ethernet wiring hubs. But rather than go through a series of incremental bandwidth increases, management at the Fargo, N.D., firm took the bull by the horns and went for the top echelon of high-speed backbones. Officials began comparing Asynchronous Transfer Mode (ATM), which now has a top speed of 2.4Gbps, and Gigabit Ethernet, which operates at 1Gbps.

They arrived at a decision quickly. "We thought Gigabit Ethernet offered us a more familiar network environment and more configuration flexibility than ATM," says David Stone, IS manager at Eide Bailly.

The buck goes to Gigabit Ethernet
While worldwide ATM corporate backbone revenues are projected to increase gradually through 2002, Gigabit Ethernet revenues should explode.

Source: Dell'Oro Group
IT officials at many other corporations are reaching the same conclusion. Even though vendors completed Gigabit Ethernet standards only in the summer of 1998, the technology is rapidly moving into corporate backbone networks. Worldwide Gigabit Ethernet revenue for enterprise networks is projected to reach $1.2 billion in 1999, surpassing ATM revenue, according to the Dell'Oro Group, a Portola Valley, Calif., market research firm (see chart, "The buck goes to Gigabit Ethernet").

Suppliers also see momentum shifting from ATM to Gigabit Ethernet. "We are pumping more research and development dollars into our Gigabit Ethernet products than our ATM products because we think they will deliver a better return," says Luc Roy, director of product marketing at Nortel Networks Inc., in Santa Clara, Calif.

Corporate interest in Gigabit Ethernet is growing for a number of reasons. Its lower pricing, simpler installation, and lesser training requirements, along with a clear migration path, head the list. While some companies are opting for ATM because it handles multimedia more adeptly, most feel more comfortable selecting Gigabit Ethernet for their backbones.

Gigabit Ethernet steps forward

Cost is always a factor in the corporate IT equation. Among networking options, Ethernet is less complex and generates higher volume sales than alternatives, leading to relatively low prices for Ethernet and Fast Ethernet wares.

AT A GLANCE: Eide Bailly LLP
The company: Formed through the merger of two accounting firms, Eide Bailly offers consulting and accounting services to businesses and individuals through 10 offices in six states.

The problem: After the merger, the firm needed a better option speed-wise than either the 10Mbps Ethernet or the 16Mbps token ring networks that had supported the individual operations.

The solution: 3Com Corp.'s SuperStack II. Eide Bailly opted for a Gigabit Ethernet switch, which would be less expensive, simpler to install, and easier to maintain than an ATM option.

Adding to the appealing price is the fact that many companies have already selected Ethernet to support other networking needs. Several years ago, 10Mbps Ethernet became the de facto desktop technology and erased token ring from the corporate networking map. In the same timeframe, the delivery of 100Mbps Ethernet switches offered companies a clear migration path from lower speed versions of Ethernet. As a result, Fast Ethernet became the primary way corporations connected their servers and helped to push alternative technologies such as Fiber Distributed Data Interface (FDDI) into oblivion. Selecting Gigabit Ethernet for backbone connections means a company can stick with one network option across its entire enterprise, thereby simplifying installation and maintenance.

That flexibility appealed to Eide Bailly officials. "Once the higher speed connections were operating, we felt we could move our 10Mbps Ethernet hubs to our remote offices since they are relatively simple to maintain," says Stone.

So IT officials looked at Gigabit Ethernet products from 3Com Corp., Cabletron Inc., Cisco Systems Inc., and Nortel Networks. They chose 3Com's SuperStack II because it had a flexible design, and at $60,000, it cost 10% to 15% less than competitors' products, notes Stone.

Moving to the higher-speed option required minimal training for Eide Bailly's technicians. Many vendors have delivered management tools that examine Ethernet packets, which are the same for the 10Mbps, 100Mbps, and 1Gbps versions, so network administrators will have a good understanding of how higher-speed switches will work alongside their slower counterparts.

In addition, many companies want to use one network protocol (TCP/IP) to carry all of their corporate traffic, and Gigabit Ethernet accommodates that desire. "When a company mixes ATM and TCP/IP, Ethernet packets have to be converted to ATM cells, which can decrease performance and increase network complexity," says Nortel's Roy.

Vendors are voicing the same interest in Gigabit Ethernet. Established vendors Cabletron, Cisco, Lucent Technologies Inc., Nortel, and 3Com joined start-ups Alteon WebSystems Inc., Extreme Networks and Foundry Networks Inc., to deliver such products. This intense competition is one of the reasons why the Dell'Oro Group expects Gigabit Ethernet pricing to drop from $1,600 per port in 1997 to less than $500 in 2000.

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