Sun formally enters gigabit race

Sun Microsystems (SUNW) announced its first foray into the lucrative switching market today, sending signals that it may play a larger role in the networking market while buoying the prospects of a Gigabit Ethernet start-up.

As previously reported by CNET NEWS.COM, Sun is joining forces with Gigabit Ethernet switch and adapter card maker Alteon Networks, which is among the first of more than a dozen start-ups looking to take advantage of the emerging 1,000-mbps networking standard.

For Sun, the deal means that the workstation, server, and Java-based software giant will be yet another player in a market for gigabit-speed switching gear that is expected to grow to between $1.5 billion and $3 billion by the year 2000. For Alteon, Sun's sales team offers the start-up an entree into corporate accounts it may not otherwise been able to approach.

"It means they have a very good channel and very good potential for moving product," said Craig Johnson, principal analyst for Current Analysis.

Sun has previously not been thought of as a large player in the internetworking hardware market. But Sun--like Hewlett-Packard or Compaq Computer--knows a big revenue opportunity when it sees one and has quickly filled a strategic hole with the Alteon deal.

The addition of Gigabit Ethernet technology--for which a final standard is expected to be in place by the first half of next year--into the Sun arsenal will allow the company to expand its role into the lucrative networking market by offering gigabit pipes for server-to-server connections and server-to-network switch connections.

"We think Gigabit Ethernet will play a major role in the future," said Steven Moustakas, director of network products for Sun. "We're looking very, very carefully at the overall networking market."

Other forays into networking hardware could enable Sun to offer total solutions packages that the likes of HP and IBM are famous for, combining switches with servers and desktops.

Sun espouses a network-centric view of the world, with large servers providing applications and data to thin clients. In this world, networking pipes need to have the capacity to send the data from the server to the desktop quickly. "The whole industry is changing in that direction," Moustakas added. "We can't neglect this particular area."

The company could serve as a central integration point for a variety of third-party networking products. For example, IBM offers Xylan and Cascade Communications switching gear to its customers, along with its own set of products.

A slew of gigabit-speed gear based on "classic" Ethernet technology will dominate the upcoming Spring Networld+Interop '97 conference in Las Vegas, Nevada. Initial products will be based on a draft specification that is not expected to change as the 1,000-mbps technology moves through the Institute of Electrical and Electronics Engineers ballot process. Sun, with its branded Alteon switch, will be part of an interoperability test being conducted at the show by the Gigabit Ethernet Alliance.

The server switch and adapter card will be available in the third quarter. The card is priced at $2,295 and the switch is priced at $9,995.