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I spat out a tweet recently while reviewing Mellanox’s financial results. The tweet, which advises people not to buy 40G, was heavily shared on LinkedIn and Twitter. This surprised me. I thought everyone knew that 40G is obsolete!

Mellanox predicts that 40G will shrink to 7% of the market by 2020. 10G is already shrinking and will be 42% of the market by 2020 (down from 81%).

Why Is 40G Ethernet Obsolete? Short Answer: COST

The primary issue is that 40G Ethernet uses 4x10G signalling lanes. On UTP, 40G uses 4 pairs at 10G each. Early versions of the 40G standard used 4 pairs, but rapid advances in manufacturing developed a 4x10G WDM on a single fiber optic pair.

Each 40G SFP module contains a silicon chip that performs multiplexing so that the switch see 40 gigabits in and 40 gigabits out. It’s similar to Coarse Wave Division Multiplexing when using fiber. When you buy a 40G cable or QSFP, you are paying for the cost of the chip and software, plus the lasers, etc.

When using 25/50/100G, the “lane speed” is increased to 25 gigabits per second. For 50G there are two 25G signalling lanes and, of course, four 25G lanes in 100G Ethernet.

It’s cheaper to buy 50G with two lanes rather than 40G with a four-lane MUX. On the open market, a 50G unit is about half the price of 40G. A 25G interface is about 25% more expensive than 10G.

Mega-Scale Clouds

Volume counts in this market. Mega-scale cloud companies abandoned 40G a couple of years back. Their ordering volumes measure in the hundreds of thousands of units. Large volumes mean cheaper manufacturing, and that drives down the unit price and increases availability.

Vendors With Hard-To-Sell 40G Products

Reminder: Vendor “approved” SFP modules have highly inflated margins and are priced differently. Some enterprise IT vendors have a lot of money invested in 40G switches and are struggling to move that product. By over-pricing the 25G SFP modules you may find that 40G appears to be more attractive.

But, but, but…

Yes, vendors have proprietary BiDir optics that seem cheap. But they are only cheap compared to their pricing on the 25/50G switch that they don’t want to sell yet. They need to get rid of the old stock. Or maybe they haven’t ramped up on the 25/50/100G switches because customers aren’t asking for them.

Don’t ask for 40G. Don’t buy it. Go directly to 25/50/100G interfaces for lower lifetime costs.