The price of Ethernet has risen for the first time in several years even though people are buying more switches, says market researcher Dell'Oro Group. The company says the average price of an Ethernet switch port has risen to $96, with Fast Ethernet around $50 per port and Gigabit around $200.

"Over time prices have always gone down but for the first half of 2004 the average price of a Fast Ethernet port rose by a few percent," says Seamus Crehan, Dell'Oro's director of Ethernet switch research.

"There's a two-pronged upgrade going on," he says. "There's the shift to higher speeds as the prices of the different speeds converge, and the other prong is there's more intelligence going into the switch - that affects all speeds but it affects Fast Ethernet the most."

Crehan warned that while switch buyers are therefore getting more for their money, for example Power-over-Ethernet and Layer 3/Layer 4 capabilities, there are also serious management challenges ahead as the intelligence in the network moves from the core to the edge.

"It used to be the IT manager would try to centralise the complexity, but we are starting to see enterprises roll out IP telephony and wireless LANs, and those applications drive the need for more feature-rich switches, especially on the client side," he says.

He adds that on the one hand, convergence means that in the long term there will be less to manage, but that on the other, the actual management will be more complex. And in the interim, both converged and non-converged networks must be managed side by side.

Dell'Oro figures show strong demand for Ethernet switches during the first half of 2004, thanks to pent-up demand. Crehan adds that he expects Ethernet switch pricing to fall again in the future.