Server-class Ethernet $/Gb plummeting, Driven by 2550100GbE

CREHAN Server-Class Adapter & LOM Bandwidth and Pricing Trends

“Over the past five years, server-class Ethernet networking bandwidth has seen a robust increase of about thirty percent per year, in conjunction with ever-increasing data center network traffic and an annual dollar-per-gigabit price decline in the ten to fifteen percent range,” said Seamus Crehan, president of Crehan Research. “With the arrival of 25 gigabit Ethernet (GbE), 50GbE and 100GbE, we expect an inflection change in this trend, with total bandwidth increasing close to fifty percent annually and the cost-per-gigabit of that bandwidth declining by close to thirty percent annually.” He added, “In fact, we are already seeing examples where 25GbE, 50GbE and 100GbE data center Ethernet products have very small – and sometimes no – price premium over the comparable lower speed offering.”

Despite its projection of a very strong ramp in the adoption of 25GbE, 50GbE and 100GbE, Crehan Research expects 10GbE to remain a very important server-class Ethernet networking technology through 2020, especially in enterprise data centers. “Although there is a lot of excitement around 25GbE, 50GbE and 100GbE, and justifiably so,” Crehan said, “many enterprise data centers are still using 1GbE for server networking attach. A lot of these customers will likely see 10GbE, and especially 10GBASE-T, as their next network upgrade path.” In a 2015  long-range forecast report, the firm noted that in contrast to the past, many high-speed Ethernet networking speeds would coexist simultaneously, as the diverse segments of the market looked for more targeted solutions to meet their specific needs.

The report predicts that the many various high-speed Ethernet options will coexist for some time, each benefiting from the demands of a specific market segment. For example:

• 25GbE is expected to see a strong initial ramp from deployments by cloud titans such as Google and Microsoft, an area of the market where 10GbE server networking is currently prevalent.
• 10GbE should see its third, and biggest, adoption phase as the mainstream enterprise market upgrades its mostly 1GBASE-T server and server access infrastructure to 10GBASE-T.
• 40GbE is starting to ramp significantly, benefiting from a current window of opportunity as the most attractively priced data center Ethernet speed from a bandwidth perspective.