FCoE: From Fee to Free
With demand for FCoE more sluggish than vendors had hoped, 10 Gigabit Ethernet switch and adapter makers are making it available for free.
Tue, February 08, 2011
Network World — With demand for FCoE more sluggish than vendors had hoped, 10 Gigabit Ethernet switch and adapter makers are making it available for free.
Fibre Channel over Ethernet (FCoE) is a standard driven largely by Cisco to converge customers’ data center LAN and storage fabrics with 10G Ethernet. Industry heavyweights Intel (INTC) and Brocade are among those now giving away FCoE capabilities.
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There are several factors prompting vendors to slash FCoE prices or stop charging for it altogether, including market indifference; technological immaturity; competing alternatives, such as virtualized Fibre Channel and Ethernet I/O; the recession; and vendors looking to drive switch volumes.
“When FCoE first came out there used to be a fairly large price premium,” says Alan Weckel, director of Dell’Oro Group. “Cisco had to give it away for free to drive switch volumes. Users were not adopting as rapidly as thought or that Cisco had hoped for.”
Cisco insists it still charges for FCoE on the Nexus 5000, but would not say how much. The company also says it is pleased with the uptake in FCoE since unveiling the Nexus 5000.
“Since Cisco and its partners first announced FCoE capabilities three years ago, we have seen rapid growth in industry and market acceptance for a unified fabric approach,” said Jackie Ross, vice president, Cisco Server Access and Virtualization Group. “We have a 33% FCoE attach rate on our Nexus 5000 10-Gigabit Ethernet access switches and all supported adapters on our Unified Computing System platform are 10-Gigabit Ethernet Converged Network Adapters or CNAs, supporting FCoE, iSCSI, NAS and native Fibre Channel.”
And despite the low cost for FCoE, Dell’Oro notes a 72% compound annual growth rate in FCoE revenue over the next five years – from $180 million in 2010 to $2.7 billion in 2015. But in actuality, FCoE switch revenue is a subset of overall 10G Ethernet revenue, which is currently about $5 billion, according to Dell’Oro.
“Port shipments for adapters and switches have exceeded what we projected for 2010, but prices have come in lower,” says Tam Dell’Oro, founder and president of Dell’Oro Group.
BACKGROUND: Ethernet data center standards
Indeed, there is virtually no difference in the average selling price of FCoE switch ports and plain vanilla 10G Ethernet switch ports, according to Dell’Oro. In 2010, the ASP of an FCoE switch port was $475, dropping to a projected $169 in 2015; for 10G, the ASP of a switch port was $442 in 2010, dropping to a projected $178 in 2015.