LAN switching prices drop

As highspeed localarea network switching technology continues to pour into the market the price per port of existing products continues to fall most markedly at the lower end of the spectrum. The price of LAN switching gear increasingly viewed in the federal sector as an alternative to traditiona

As high-speed local-area network switching technology continues to pour into the market the price per port of existing products continues to fall most markedly at the lower end of the spectrum.

The price of LAN switching gear increasingly viewed in the federal sector as an alternative to traditional router-based networks has dropped around 60 percent for low-end Ethernet products. Prices also have dropped for high-end Asynchronous Transfer Mode products with the price per port in some cases dropping to less than $1 000.

"I think you're seeing a general pressure in the market to bring out higher-density technology - more ports on the same footprint device - and the price per port is decreasing " said Jim Massa director of federal operations for Cisco Systems Inc. Herndon Va. The expected advent of new products and faster technologies next year "is driving prices down at the core and the edge " added Paul Barrett manager of federal operations for 3Com Corp. Vienna Va.

LAN switching technology has gained momentum in the federal market during the past year [FCW Nov. 18 1996]. Although many federal buyers focus on the midrange and high-end portions of the LAN switching market decreases at the low end will appeal to customers such as the U.S. Postal Service and the Social Security Administration - customers with hundreds of remote branch offices industry executives said.

The need for affordable faster packet throughput is leading buyers to replace older network infrastructure devices - in some cases with switches said Jon Bazemore the Internet solutions manager at BTG Inc. Fairfax Va. Requirements for speed and efficient packet management make switches the way to go.

Overall the combined voice and data communications hardware market for the federal sector is expected to grow by 4.5 percent a year from 1997 through 2002 said Brian Haney senior analyst with Input Vienna. Continued government downsizing will increase the demand for communications technology.

Low-End Prices Decline

Prices at the low end of the market have "dropped dramatically" during the last 15 months throughout the industry generally said Michael McConnell director of the LAN services program for strategic consulting company Infonetics Research San Jose Calif.

McConnell cited a stand-alone Cisco Systems Inc. 10 megabits/sec Ethernet switch that sold in the second quarter of 1996 for about $166 per port compared with a Lantronix Inc. switch now selling for about $62 per port. Competition is heated at the low end but it may be based more on functionality and features than on price McConnell said. For example Cabletron Systems Inc.'s SmartSwitch 2200 includes growth security and management features.

The price of the more feature-rich products also is declining. Cabletron's SmartSwitch 2200 which is a stand-alone Ethernet workgroup switch is available at General Services Administration street pricing for about $185 per port according to Bob Travis program director for federal systems Rochester N.H. A year ago a comparable product the FN10-24 sold on the GSA schedule for about $213 per port.

Meanwhile the 10/100 megabits/sec area "is becoming a commodity product a tactical solution for clients " Travis said. Cabletron's SmartSTACK 10 which is a stand-alone Ethernet workgroup switch with little management or growth capability sells on the GSA schedule for about $125 per port. A year ago comparable technology went for $291 per port.

Xylan Corp. now offers high-end Fast Ethernet switching with its ESM-100C-12 module priced at $455 per port according to David Rodewald Xylan's director of corporate communications Calabasas Calif. This price includes embedded virtual LAN and management services he said. Fast Ethernet switches in the $250 to $300 per-port range typically are stand-alone devices with unmanaged ports.

A second recently announced Xylan product the ESM-C-32 module offers Ethernet switching at $185 per port the company said.

Unlike a hub each port is fully switched Rodewald said.

High-End Moves

Big government programs in the offing also may put some pressure on the high as well as the low end of the market. The Navy's Information Technology for the 21st Century program and the pending Pentagon Renovation project are expected to be heavy buyers of switching products Cabletron's Travis said. There are a lot of large bidding wars going on he added.

The price of high-end ATM switches has come down although not so dramatically as low-end Ethernet machines Infonetics' McConnell said. ATM ports on stand-alone units went for $2 118 apiece in the third quarter of last year but they now sell for $1 692 per port. "There's a lot of room for the higher end to come down " he said.

Fore Systems Inc. which focuses on the high end of the market has brought the per-port cost per ATM connection to the desktop below $1 000 for the first time in the industry with the introduction earlier in the year of an OC-3 switch the LE-155 said Richard Bibb vice president of Fore's federal operations in Bethesda Md. That per-port price includes the cost of the workstation adapter card.

-- Adams is a free-lance writer based in Alexandria Va.

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