Lifting the layers

As port prices drop in the Layer 2 space, vendors are looking to boost revenues in other areas. Consequently, they are encouraging enterprises to invest in Layer 3 switches.

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By  Zoe Moleshead Published  August 31, 2003

Layers 2-3|~||~||~|While wireless devices and technology are garnering the lion’s share of current publicity, switching remains the foundation of network infrastructures and is the cornerstone that wireless builds on. As such the market is continuing to grow steadily. In-Stat MDR reports that over 150 million local area network (LAN) ports were shipped worldwide last year and this figure is expected to rise to nearly 250 million by 2007.

While high performance, bandwidth availability, and quality of service (QoS) remain the core requirements for any switch user, enterprises are also beginning to demand greater levels of redundancy and power over Ethernet (PoE) from their switching infrastructure. The latter enables users to run both Ethernet and power over the same cable, eliminating wires and reducing overheads.

“The provision of power over Ethernet is an important area. It is particularly significant in converged networks where the IP telephone just needs a single RJ45 connector into the wall. It doesn’t need a separate power break, it gets both its Ethernet and power connectivity over the one cable,” explains Ian Jones, sales engineering manager for Ethernet & content switching, Nortel Networks, Europe, Middle East & Africa (EMEA).

Power concerns are also leading enterprises to deploy multi-link trunking and split multi-link trunking designs through their switches to ensure that network links and devices have the necessary resiliency to handle any possible outages.

“High availability is another key part… what happens when something breaks, someone trips over a cable or the power supply goes? We are becoming more and more dependent on the network to do business… so we have to make sure that networks are deployed in such a way that we plan for glitches or failures and make sure that if any of these events happen we can recover in less than a second,” explains Jones.

While the need for redundancy and high availability is changing the way enterprises look at switches as a whole, there has also been a gradual shift in the demand for individual layers. While Layer 2 remains dominant, vendors have been pushing their core Layer 3 switches out to the edge of the network, broadening their appeal and enabling them to grow at a faster rate than Layer 2.

“The Layer 2 market is by far the biggest. It accounted for more than 80% of EMEA’s port shipments in 2002. Layer 3 is much smaller in terms of port shipments, it was about 13%, while the Layer 4-7 market is not even 1% of the total market in shipments,” says Severine Real, analyst, enterprise communications, Gartner Group.

However, Layer 3 is delivering the greatest revenues to vendors as a result of the higher price of switches. Real reveals that Layer 3 currently represents 50% of switching returns, followed by Layer 2 with 47% and Layer 4-7 with only 3%.

The transition from Layer 2 to 3 is, however, proving somewhat of a natural and evolutionary process. Layer 2 switches were seen as somewhat revolutionary when they were developed as an alternative to shared hub mediums.

“Layer 2 switches improved performance compared to the old shared hubs. The Layer 2 switch was a big step forward in terms of the performance and speed of the network,” confirms Hani Nofal technical manager, 3Com Middle East.

However, the falling price of Layer 2 switches, combined with increasing uptake, has led to congestions and bandwidth constraints. “Layer 2 is for everybody and so there are all sorts of congestions and traffic problems,” says Farook Majeed, regional director, Foundry Networks, Middle East.

Consequently, Layer 3 switches emerged as a solution to this congestion. Furthermore, they have introduced greater levels of flexibility and control for network administrators, as well strengthening security and QoS levels.

“Layer 3 switching was designed to facilitate a hierarchical networking structure and provide a suitable way to scale the network without the issue of port performance or loss of control,” says Nofal.

“So it [Layer 3] helped administrators to segment their networks. For instance, a Layer 3 switch will allow the network manager to design their network in four or five segments… what we call virtual local area networks (VLANs),” adds Nofal.

||**||Layers 4-7|~||~||~|While Layers 2 and 3 jockey it out for port shipments and revenues, Layer 4-7 remains a somewhat niche market. Labelled as ‘intelligent switching,’ it has emerged in response to the growing use of the internet and offers features such as firewall and server load balancing.

“Layer 4-7 switching is much smarter. Everything up to Layer 3 doesn’t understand the application, they don’t know if users are browsing the web or sending an e-mail. But as we move up the Layers they become more aware of the application that is being used,” explains Rani Elhmayssi, systems engineer, Cisco Systems, UAE.

While vendors concede that Layer 4-7 isn’t required by every enterprise; online content providers and those companies that interact continually through or with the internet are prime candidates for such switches. The load balancing and caching capabilities of these products provide the necessary uptime for 24x7 environments.

“As organisations began connecting to the internet and continue to become internet and intranet aware, Layer 4-7 switching has become more popular because it introduces functionalities like server load balancing,” confirms Majeed.

“Not only that, but the Layer 4-7 switches can do multiple things, like cache switching, which is useful when a organisation starts connecting to the internet or an extranet,” he continues.

Moving forward, vendors are focusing on a number of elements, with the most obvious plans involving the continual improvement of QoS, performance, bandwidth efficiencies and control.

“We are continuously enhancing the QoS and control on our switches. We will be improving bandwidth and enabling enterprises to do rate limiting, which is allocating bandwidth to users, especially on the edge switches,” explains Nofal.

Additionally, vendors are extending their support to the security space, with the inclusion of an increasing number of authentication and encryption protocols, such as 802.1x in their switches.

“We are also working on enhancing the security of our switches with RADUIS authentication… So users will not be able to access the network, whether they are coming from a wired or wireless network, without providing a valid username and password, which will be [validated by] a RADIUS server,” says Nofal.

Cisco, meanwhile, is looking to fill the gaps in its portfolio and between its existing product ranges. As such, Elhmayssi says, users can expect to see a number of new switching products being rolled out over the next 12 months. Furthermore, IPv6 functionality is also going to a play a significant role in the network giant’s forthcoming solutions.

“Most of the new switches are going to be focusing on IPv6 requirements and this is a big driver for us in both the switching and routing fields,” says Elhmayssi.

Looking at the wider switching market, the main action will remain in Layers 2 and 3, with the latter tipped as the market to watch. As prices continue to fall in the Layer 2 market, vendors have been pushing their weight behind Layer 3 to encourage uptake. Furthermore, price drops, combined with superior functionalities, will also encourage customers to invest in Layer 3 switching.

“Layer 2 is very commodotised and prices are low. For Layer 2 10/100 Ethernet you can get a switch where the price per port is about US$5. While Layer 3 switches were deployed at the backbone, vendors are now pushing for Layer 3 at the desktop because then they can sell more expensive switches and make more revenue,” comments Gartner’s Real.

Furthermore, the line between Layer 2 and 3 will continue to blur as more and more enterprises opt for Layer 2/3 switches. Users will be able to run a Layer 2 switch and then turn on Layer 3 functionalities as and when they are required. This crossover will also ensure that demand remains for Layer 2 switches.

“The price barrier between Layer 2 and 3 is also becoming more and more marginal so people end up buying a Layer 2/3 switch by default because there is no price difference,” explains Majeed.

“But Layer 2 is not going to die out, people will still need the functionality, but they will probably stop buying a Layer 2 only switch,” he adds.||**||

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