NetGear Inc. CEO Patrick Lo wants to see Gigabit Ethernet in every office and home by the end of this year. And because NetGear, in Santa Clara, Calif., has a foothold in the consumer and small- and midsize-business markets, its in a better position than most of its rivals to take advantage of growth in the Gigabit Ethernet market.
eWEEK Labs Senior Writer Anne Chen and Technical Analyst Francis Chu recently sat down with Lo to discuss the push toward Gigabit Ethernet, the enterprise wireless marketplace and how NetGear will continue to untether computing.
What makes this year “the year of Gigabit Ethernet”?
This is the year of Gigabit Ethernet because of the price point. Now you can buy a 24-port Gigabit switch, no matter how sophisticated it is, for less than $1,000. We are talking about a full Layer 2, SNMP-manageable Gigabit switch.
Another factor is that, this year, the Gigabit Ethernet card is the same cost as the [10/100M-bps] Ethernet card. That alone is a reason were making a push this year.
Already there is, if you think about it, a movement toward Gigabit Ethernet. Most of the high-end Macintosh computers are equipped with Gigabit, and OEMs from Taiwan are starting to integrate Gigabit Ethernet in high-end PCs as well. The question is not, Why now? The question has become, Why not? The price of Gigabit Ethernet has become so low that theres no reason not to get ready for the next generation of applications.
Your competitors also offer low-end Gigabit switches that compete in terms of price and number of ports. How will you differentiate yourselves? Is this a price-point-per-port issue?
We actually command the highest price per port among our competitors. Were the only ones [with these Gigabit switches] on the retail shelves. At the end of the day, I dont think the market could accommodate two or three Gigabit switch manufacturers on the shelves. If you talk about the number of Gigabit port [devices] shipped, we probably run only after 3Com [Corp.], and on managed Gigabit ports, we are definitely No. 1.
People galvanize toward … who has the reputation of reliability. As you go up the food chain, its different. For medium-size businesses, were the only one offering a smart switch.
How much of your business is corporate?
On the Gigabit switch side, its pretty even right now, but keep in mind that the price points are pretty different. Over time, we believe the lower end will eclipse the enterprise side. That said, we expect that in Q3, half of our switch sales in dollars will be in Gigabit, half in [10/100M-bps] switches.
Do you have plans to move into the enterprise-class space?
We started moving into what we call the 100- to 200-user range, or medium-business market, about two years ago. We dont have plans to move into the [large-]enterprise space right now. The reason we moved into the medium-business space is because our customers began to grow out of the 100-user range.
In eight years time, [its] very likely because once our customers move beyond 250 users, well have to expand with them.
What new enterprise products do you plan to introduce in the wireless LAN market?
In Q3, we will introduce the next-generation WLAN switches for our high-end customers, which will have automatic load balancing and security controls using [AutoCell] technology from one of our partners, Propagate Networks [Inc.].
When you are in a big office environment with multiple access points, you want to be able to load-balance. So when people move them around, you hand them over so one access point isnt handling everyone. You dont want to have “sticky” people, who stay with one access point and dont move to another access point.
The device will also automatically adjust the power to provide the maximum coverage for the sophisticated medium-size business.
In the high-end wireless market, are companies mainly buying 802.11g? Are they still buying 802.11a?
We are to the point where we dont offer 802.11b by itself anymore. We are not offering 802.11a by itself but are offering it with 802.11g. 802.11a/g is more popular outside the United States, but pure 802.11a is not backward-compatible, which is why its not going to work.
Are your customers starting to implement voice over wireless?
On the consumer side, were definitely going full blast on voice over wireless. In the office environment, its much more complicated. You have multiple voice extensions, PBXes, in-house voice mail. For that, wed rather provide the QOS [quality-of-service] features on our switches and partner with people who have a full solution for voice over IP. We provide the enhanced QOS and POE [power-over-Ethernet] capability on our switches, but leave the IP phones and IP PBX to our partners.
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