Value-added resellers (VARs) should care at least a whit about terabit networks -- they may not be selling a lot of terabit routers and switches into the commercial enterprise or small and medium-sized business (SMB) space anytime in the next three to five years, but terabit capacity at the carrier level and backbone will become critical in an IT world increasingly obsessed with managed services and broadband applications such as videoconferencing.
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Terabit capacity that can support multiple transport protocols will interest VARs involved with bandwidth-intensive application solutions that are just as likely to be delivered as an on-demand service as they are to be bits on your hard drive -- not because most of your enterprise customers will be building this infrastructure, but because you'll need to deploy their solutions on top of it.
In case you haven't done the math, a terabit network can support astonishing transmission speeds of 1 trillion bits per second. While this may seem like too much of a good thing for most people right now, the uptick around Software as a Service (SaaS), IP communications and video collaboration, plus consumer-oriented applications such as streaming media and online gaming, can theoretically gobble up this sort of capacity very quickly.
It says a lot about the state of a market when one of the premier research firms in the space, Dell'Oro Group, doesn't even follow the technology yet. But the firm does make predictions about worldwide router sales, which are forecasted to grow by almost 50% over the next five years, surpassing $17 billion by 2012.
That's important because network equipment vendors such as Cisco Systems and Juniper Networks are increasingly encouraging their customers to consider terabit-capable features even as they evaluate 10 Gigabit Ethernet (10 GigE) rollouts, said Dave Casey, president of Westron Communications, a network integrator in Carollton, Texas.
The theory being put forth by some networking companies, he said, is that the transition between 10 GigE and terabit will be compressed into a shorter period of time than traditional network infrastructure upgrade cycles. "It's a game of one-up-manship right now," Casey said.
But the need for speed is clear.
Even though it doesn't follow terabit for the enterprise (yet), Dell'Oro Group believes the enterprise network infrastructure marketplace is poised for a significant refresh, pointing to high-speed switches beyond the 10 Gig level up to the 40 Gig and 100 Gig ranges. Inspiring interest in these switches are the parallel trends of data center consolidation and virtualization, along with interest in high-density energy efficiency. Aside from Cisco and Juniper, players to watch in this space include Foundry Networks and Hewlett-Packard.
Westron believes terabit technology at the backbone will be important if business video collaboration applications, such as Cisco's TelePresence line, become more widely used. While terabit considerations won't generally trouble small businesses, players in specialized markets such as 3-D animation production could find an application, he said.
"What we're trying to do is identify the people who are the early adopters," Casey added. "The carriers are on the edge, of course. The enterprises are several years out, maybe the next cycle."
Sandeep Walia, president of Ignify, a Microsoft Gold Certified Partner and Sage Development Partner in Cerritos, Calif., said that while his company does not plan to deploy terabit networks, they are increasingly important for his company's customer relationship management (CRM) and enterprise resource planning (ERP) implementations.
"The ideal customer is someone who is a large telecommunications company or who has hundreds of thousands of subscribers using their network," Walia said.
The primary drivers for terabit capacity among Ignify's customers include e-commerce applications challenged by a high volume of transactions as well as multi-country ERP installations, where many users are sharing databases. Ignify should know, as it recently deployed what it bills as the world's largest Microsoft Dynamics AX ERP implementation, for a wireless handset insurance company running across a terabit network.
"Generally we're seeing the shift as fiber becomes cheaper," Walia said. "Response time for applications such as these is very important."
David Bennett, president of Connections for Business, a VAR in Hollywood, Fla., chuckles when asked to predict when terabit will become a dominant network infrastructure option, noting that it will take two to three years for the ongoing 10 GigE migration to play out. One gating factor will be the bus speed of client computers as well as the limitations of existing routers and switches, he said. Still, as computing increasingly moves to a service model, the shift to higher speed makes sense.
"What I love about this industry is that everyone is building so fast. Generational shifts can happen in 18 months," Bennett said.
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Heather Clancy is an award-winning business journalist and consultant on high-tech channel communications with SWOT Management Group. She can be reached at email@example.com.