Technology: Startups work on gigabit ethernet

ATM equipment vendors better watch their backs, because a cluster of start-ups is gearing up to make gigabit ethernet the LAN backbone technology of choice.

At least four vendors have plans in the works to offer 1Gbit/s ethernet hubs and switches for connecting 100Mbit/s fast ethernet devices. This is just the tip of the iceberg, with more than 10 other such start-ups expected to appear during the next six months, analysts say.

"Gigabit ethernet is the next hot market," says Todd Dagres, general partner at Battery Ventures, a venture capital firm based in Boston. "I've looked at eight companies' business plans already."

Early leaders in the market will likely include start-ups Granite Systems, Packet Engines, Promine and Rapid City, industry observers say. Heavyweights 3Com, Compaq, Hewlett-Packard and Sun are also plotting gigabit ethernet strategies.

Although a completed gigabit ethernet standard is not expected for at least a year from either of the IEEE 802.3 or 802.12 committees, prestandard products are expected to hit the market in six to nine months.

Vendors says gigabit ethernet gear will cost $US2000 to $US3000 per port, about two to three times as much as 100Mbit/s ethernet switches and about the same as ATM switches. But observers expect gigabit ethernet equipment prices to fall below $US1000 per port quickly as the market grows.

Andy Bechtolsheim, president of Palo Alto, California-based Granite, says that gigabit ethernet is a much more obvious backbone technology than asynchronous transfer mode because it is compatible with existing network protocols, net management software and applications. "Ethernet may not be perfect in all ways, but it is a dominant, established standard that everybody knows how to use, whereas ATM is a brand-new world," he says.

Bechtolsheim, one of Sun's first employees, also points out that there are not nearly as many interoperability issues with gigabit ethernet as there are with ATM.

"If there was one lesson in networks over the past 15 years, it's that compatibility is the most important issue," he says. "ATM violates this on all fronts -- we see ATM as the most incompatible network that anybody ever thought about."

Bernard Daines, president of Packet Engines, agrees that backward-compatibility is a big feather in gigabit ethernet's cap.

"There is full interoperability between 10M, 100M and 1Gbit/s ethernet with respect that exactly the same packet will go back and forth between all of them," Daines says.

However, gigabit ethernet differs from regular 10Base-T in that it relies on Fibre Channel technology at the physical layer and does not support ethernet's carrier-sense multiple access with collision detection scheme.

Daines, who founded fast ethernet leader Grand Junction, says he remembers when people wondered why anyone would want fast ethernet when FDDI was an established, highly redundant technology.

"Gigabit ethernet will do to ATM what 100M bit/sec ethernet did to FDDI," he says. "It's true that ATM has better management and quality of service, but people really don't want the complication of ATM."

Packet Engines will initially focus product development on connecting 100Mbit/s hubs using 1Gbit/s switches and will also build half and full-duplex gigabit ethernet repeaters.

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