New Broadcom chipset signals a radical change of direction in the WLan switch market

Rethink IT, March, 2005

Broadcom has announced a chipset that could reinvent the WLan switch market completely. Just as many functions once carried out by appliances, such as security, have been subsumed into the centralized switch, now Broadcom aims to go a step further and embed the switch into an appliance, making wireless just one function within a wired switch.

Just as most analysts and vendors are pinning their hopes of continued WLan growth on switches, Broadcom's move could shift the economics significantly and make it even harder for the wireless-only independent vendors to survive, forcing them to accelerate their moves to seek differentiation through software. But it could also lower costs for companies like Cisco that are aiming for increased wireline/wireless integration.

The StrataXGS III line of Ethernet switch chips are the first step to incorporating WLan hardware into an Ethernet switch, said Broadcom. This will give wireline networking vendors, which have always played up the competitive edge they gain from being able to integrate wired and wireless, better ammunition to back up their theories, in the form of cost effective integrated hardware.

As hardware becomes cheaper and the boundaries between wired and wireless break down, the real opportunity is seen to rest with majors that can sell sufficient bulk to stay in the hardware business, such as Cisco; and third party network management or security software houses with added value for corporate systems. The latter trend is likely to accelerate the moves of companies like Roving Planet and AirMagnet to offer platform-independent software.

The flagship StrataXGS III product, the BCM56504, offers 24 ports of Gigabit Ethernet and four ports of 10Gigabit Ethernet. Among the integrated features are security elements such as encryption and denial of service blocking. It is the first Ethernet switch chipset to incorporate security blocks directly into a Gigabit and 10Gigabit architecture.

Broadcom borrowed BroadSafe encryption and policy control blocks from its BlueSteel security processor architecture. The chip also protects crypto key generation with physical-layer features to ensure that the keys are unreadable.

Broadcom is not alone in its breakthrough, with Marvell and Agere already promising similar facilities, but these companies lack Broadcom's strong position in the WLan specific sector.

"When we put together a list of user requirements, security always came out on top," said enterprise switching marketing director Eric Hayes. "But we also heard a lot about wireless Lan integration, voice over IP support and integration with storage networks using protocols like iSCSI."

While the wireless switch may be a dying product in a standalone sense, the vendors still have a couple of years to make money from them. Following Cisco's acquisition of Airespace, other networking companies are looking for a wireless specialist to help them move towards Lan/WLan convergence. One is Juniper Networks, which has long been known to be on the look-out for an acquisition in the WLan field, and may be close to a deal, given the likely shake-out that will be precipitated by the Airespace deal.

According to web site Unstrung, Juniper may have its eye on Trapeze Networks, which has strong technology, particularly in the network management area, but has failed to live up to its early aggressiveness in terms of market share, being overtaken by Airespace and Aruba.

Juniper has no clear WLan strategy but needs to develop one now that it is expanding from its traditional carrier network market into the enterprise. Other candidates could include Aruba, seen as the strongest of the remaining independents, and Colubris, with which Juniper already has a licensing deal for hotspot platforms for carriers. Colubris, like its partner, is increasingly shifting into the enterprise space.

Sources told Unstrung that there could even be a bidding war for Trapeze, with Nortel rumored to have put in an offer. Although Cisco paid $450m for Airespace, the strong players among the remaining switchmakers are likely to be valued in the $130m-$200m range.

Other companies are sticking to their wireless knitting, though perhaps with half an eye on potential acquirers. Recently, Symbol has upgraded its switch line to support larger enterprise WLans. The new WS 5100 can support up to 48 access points, up from 30 for the WS 5000, taking Symbol firmly into Cisco's territory.

The new box also supports various security standards--802.11i and both versions of WPA--and 802.11h, which is a variant of 802.11a that conforms to European requirements on interference with incumbent services in 5GHz bands. The latter is important, as many switchmakers are primarily focused on the US market, but the European enterprise is seen as a key growth area for late 2005 and 2006.

Symbol is the leading supplier of WLan switches--although that will come under threat from Cisco following its acquisition of switchmaker Airespace--and is second only to Cisco in the overall enterprise WLan market. It was the first company to offer a wireless switch and recently accused competitors of passing off devices as switches that did not really fulfil the criteria.