Teranetics Touts Low-Cost 10-Gig

Component startup looks to boost 10-Gbit/s Ethernet over copper

August 7, 2008

3 Min Read
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Paul Korzeniowski, August 6, 2008, 4:40 PM

Running 10-Gbit/s Ethernet over copper cables is not a viable option for enterprise users at the moment, but Teranetics, a provider of Ethernet components, wants to change that. Earlier this week, the company introduced the TN2022, a network chipset that promises to lower pricing by 40 percent per port.

The startup was founded in 2003 and backed with $25 million in venture capital, with LSI Logic one of the investors. Since its formation, the chipset supplier has focused on delivering components for data storage and network switch suppliers to build products that support 10-Gbit/s Ethernet transmissions over copper wiring.

To date, however, the market for such devices has been slow to emerge. In fact, The Linley Group pegged worldwide revenue for 10-Gbit/s Ethernet products at less than $2 million in 2008, with the copper sector making up only a fraction of that total.

The reasons for the slowness have been manifold. The IEEEs standards-making process took a few unexpected twists and turns as vendors could not agree on how to speed up the networking technology. Initially, some vendors were skeptical that they could support such high speeds over copper wiring, but the standards organization ratified the 10GBase-T specification in the summer of 2006.While the technical challenges have been addressed, vendors have been unable to deliver cost-effective 10-Gbit/s Ethernet products. Many of the available systems require fiber optic cabling, and have starting prices in the $2,500 to $3,000 per port range, too high for most enterprises. First-generation copper products, which are quite rare, come in at about $500 per port.

“History has proven that in order for a new networking market to gain traction, vendors have to deliver 10 times the bandwidth for three times the cost,” states Kamal Dalmia, vice president of marketing at Teranetics. By increasing the port density in 10-Gbit/s Ethernet switches, the TN2022 is designed to close the pricing gap.

The chipset places the vendor in a strong position -- at least for the moment. “Teranetics was one of the first vendors to deliver 10G over copper products and with its latest announcement has a technology lead,” notes Jag Bolaria, senior analyst at The Linley Group.

Also, the need for 10G switches could soon become stronger. The dividing lines between storage and network devices have been diminishing, and along with that change has come a desire in enterprises to funnel all of their data traffic over big pipes, especially in the data center.

But Teranetics faces some challenges in promoting 10-Gbit/s Ethernet over copper. While the TN2022 is available to OEMs, they will need another nine to 12 months to integrate the transceiver into production devices. So, customers with pressing storage needs will look to alternatives.Also, Teranetics is small player that needs support from established storage and networking vendors. Extreme Networks and Intel have stated their intentions to use the company’s chipsets, but the list of supporters lacks panache.Other companies are eyeing the 10-Gbit/s over copper market. Vendors like Aquantia, Chelsio, Fujitsu Microelectronics America, Solarflare, and Tehuti Networks have been touting their wares; and companies like Broadcom and Marvel have been hyping their plans.

“Broadcom and Marvel seem to be waiting for the market to mature before they enter it,” says Bolaria. Teranetics may be hard pressed to maintain its technical differentiation as the market matures.

Teranetics has bet its future on customers’ desire to run 10-Gbit/s Ethernet over copper wiring. Currently, the startup’s future looks bright, but it could quickly become cloudy.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.

  • Aquantia Corp.

  • Broadcom Corp. (Nasdaq: BRCM)

  • Chelsio Communications Inc.

  • Extreme Networks Inc. (Nasdaq: EXTR)

  • Fujitsu Microelectronics America Inc.

  • Institute of Electrical and Electronics Engineers Inc. (IEEE)

  • Intel Corp. (Nasdaq: INTC)

  • The Linley Group

  • LSI Corp. (NYSE: LSI)

  • Marvell Technology Group Ltd. (Nasdaq: MRVL)

  • Solarflare Communications Inc.

  • Tehuti Networks Ltd.

  • Teranetics Inc.

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