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Home > Storage Technology News > IDC: Fibre Channel switch prices dropping |
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Fibre Channel switch vendors need to significantly lower the price-per-port of Fibre Channel switches to attract small and medium-sized businesses (SMBs), according to the latest research from IDC Corp. Framingham, Mass.-based International Data Corp.'s survey, released today, shows that growth in Fibre Channel switch port shipments and revenue beyond 2005 will come almost exclusively from servers for SMBs and blade servers targeted at larger enterprises. IDC reports that both of these trends will have a significant impact on Fibre Channel switch prices. "The best new opportunities for revenue growth in Fibre Channel switches will be in low-cost, fixed-port switches for SMBs and in blade server embedded switches," said Richard Villars, vice president of storage systems research at IDC. According to IDC, the driving forces behind the market changes are a need to significantly lower price per port at both the high and low end of the markets and a need to accommodate the shifting base of servers to blades and 1U racks that will eventually account for the majority of connections to Fibre Channel switches. San Jose, Calif.-based Brocade Communications Systems Inc. jumped on the blade bandwagon last week by announcing an embedded switch that slots into IBM's BladeCenter, positioning 14 blade servers and two Fibre Channel switches inside a single chassis. QLogic has a similar deal with IBM, and Cisco Systems Inc. is also reportedly working on an embedded switch for IBM. IDC predicts that, on the whole, the price for fixed-port Fibre Channel switches will decline at about 15% per year. Another motivating factor in the Fibre Channel price drop has been the advent of IP storage technology based on the iSCSI protocol. In fact, 43% of users polled by SearchStorage.com believe iSCSI's emergence as a low cost alternative to Fibre Channel SANs is the sole reason for lower prices on Fibre Channel switches and host bus adapters (HBAs). Mike Smith, executive vice president of worldwide marketing at Emulex Corp., said that Fibre Channel prices are coming down to earth, a trend that will make the reliability and performance benefits of Fibre Channel SANs available to small businesses. "HBA pricing has been trending down since the beginning, and I think it's going to continue," he said. "Over the next year, we're going to [start showing up] in direct-attached and iSCSI storage environments." Smith believes users will benefit from more "aggressive" and cost-effective HBA designs that could lead to Fibre Channel HBAs selling for less than $500 this year. To date, Fibre Channel switches and HBAs have continued to be expensive, while pricing for disk arrays have been dropping at a rate of about 40% per year. Arun Taneja, founder and consulting analyst at the Taneja Group, said that switch and HBA prices are trending down at about 10% per year. Taneja said the lack of competition in the Fibre Channel community has kept the price of switches, directors and HBAs high. Taneja called the HBA market an oligopoly, dominated by Emulex and QLogic. He said the switch market has begun to correct itself because of the emergence of Cisco as a serious challenger to incumbent leaders Brocade Communications Systems Inc. and McData Corp., causing price drops and "spoiling the party."
For more information: Brocade's 128-port switch drains less power Dirt cheap iSCSI software hits the shelves Sub-$10,000 SANs become a reality
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