The price gap between router ports and switch ports continues to grow, with 10GBASE-LR ports going now for about $4,000, compared to over $200,000 for OC-192 POS ports. And while short-reach products like 10GBASE- SR and 10GBASE-CX are anywhere from 30% to 70% cheaper than 10GBASE-LR, there is only about a 15% savings when putting a 1310nm transmitter on an OC-192 POS card in lieu of 1550 nm transmitter.
The impact of persistently high router port prices is that everyone outside the major telcos is looking to bypass them, either by pushing more traffic forwarding down to the optical layer, or by stretching point-to-point Ethernet networks to reduce the number of routing hops. While there is an operational benefit of containing IS-IS or OSPF tables, the cost of filling up a network with OC-192 or OC-768 router cards is simply prohibitive for many enterprise and research applications.
Router cards are not likely to get much cheaper, because many of their costs are tied to hardcoded features that can be done in software at lower line rates. The advent of 10 Gigabit networks has brought along heavy demand for TCAMs and network processors that speed up route lookups, but adding more electronics has only exacerbated the price gap relative to static connections. Add in a few load balancing features or the ability to forward on TCP port number and electronics costs really take off relative to standard Ethernet switches.
While Cisco (CSCO) has both switching and routing products it can put out there, Juniper (JNPR) arrived late to the top-of-rack switching market, and many of its efforts to beef up memory and operating system capabilities might impress telecom providers, but serve little purpose in the data center.