Meanwhile, KeyEye says its nearing full production of a family of transceiver chips designed to help combine 10G-bit speeds and inexpensive copper cables, a move that it says many companies would like to see happen in the data center. The 40-employee network chip maker believes businesses want to combine 10G-bit bandwidth and low-cost Category 6 copper cables for connecting servers and storage, whereas today they use fiber or special copper InfiniBand cables, said Fred Lancia, vice president of sales and product marketing, in Santa Clara, Calif."The reality is theres growing demand for 10 Gigabit for a number of different reasons. Throughput is one," he said. However, "Its still very expensive, so thats delaying implementation and demand for it."The company is offering three chips, which prepare signals for transmission over a network cable. Much of KeyEyes expertise, therefore, lies in encoding and decoding signals as well as in eco cancellation. Its KX1000 will enable using 10 Gigabit Ethernet to make short connections, such as between switches. Its KX1001 chip aims to enable the use of 10 Gigabit Ethernet over Cat. 6 cables to replace fiber cables. Meanwhile, its KX1003 chip aims to replace InfiniBand cables with Cat. 6 copper wire. The KX1001 and KX1003 chips could be used to position Cat. 6 cables as a medium for Ethernet or InfiniBand for jobs such as high-performance computing clusters. Using Cat. 6, which helps cut costs, also makes Ethernet a more viable competitor to InfiniBand, Lancia argued. KeyEyes chip family uses a specification called PAM-4, however, whose method of encoding differs from that of the forthcoming IEEE 10GBase-T Ethernet over twisted pair copper standard. However, the company believes that between pent-up demand and the time it will take gear that uses the standard, expected to be finalized this year, to hit the market, many companies will adopt equipment with its technology. Next year, the company plans to follow up with a line of 10GBase-T compliant chips, Lancia said. KeyEyes pitch for moving to 10G-bit gear revolves around using copper versus optical cables. The company aims to sell its chips to companies that make network adapter cards, line cards or the modules to go on those cards. Modules using KeyEye chips would cost about a third of the price of 10G-bit optical modules for fiber cables used in adapter cards. Right now they cost manufacturers around $500, Lancia said. "The demand is there. The thing thats preventing 10 Gigabit is cost. Everyones clamoring for lower cost solutions. So were happy to enable them," he said. To read more about 10 Gigabit Ethernet pricing trends, click here. Still, while both companies have the advantage of being early to an emerging space in the networking market, they face numerous challenges, not the least of which are the potential for larger competitors, such as Broadcom, to step in and the fact that equipment makers might not be as intent on lowering the price of 10G-bit gear as the two chip makers are, said Jag Bolaria, senior analyst at the Linley Group, in Mountain View, Calif. "Its a cost story. Basically theyre all trying to reduce the cost of 10 Gigabit," he said. "The argument theyre both working at is driving down the cost will increase the available market for that." ClariPhys pitch for reusing cables would hold the most appeal to businesses whose cable installations are the most complicatedgoing through walls, for example. Meanwhile, KeyEye must convince its investors and its customers that its technology can move from pre-standard 10 G-bit over copper to the 10Gbase-T specification, Bolaria said. But it might not be lower prices on gear so much as new applications, such as high-performance computing, that could crack open the 10G-bit space. A company with one foot in servers and another in networkingsuch as Hewlett-Packard, which already has 10 Gigabit Ethernet gear availablecould get the ball rolling by introducing lower-priced gear, Bolaria said. "As with any product, a little bit of luck has to come into it," he said. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.