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The Right Network Can Lower Your Total Cost of Ownership

You need to consider more than the purchase price when building the network that runs your business

As a small or mid-size business, you need to make your dollars stretch. But when it comes to investing in the network that runs your business, saving money on the purchase price can cost you more over time—at least 20-35 percent over a three-year timeframe. You need to consider the total cost of ownership (TCO) of the equipment you’re purchasing, including implementation, network downtime, and security breaches.

With a tactical network—one that provides simple connectivity—you could end up spending more money on equipment and services to meet the needs of your business. Also, if your network includes devices from multiple vendors, you may spend more time managing and coordinating those vendors and more money troubleshooting problems rather than focusing on running your business. This loss of time and money increases TCO and decreases the value and return on your technology investment.

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Network Operations Automation for Any Location, Any Application, Any Scale

With this week’s announcement, Cisco continues its innovation and leadership by bringing unmatched architectural flexibility and revolutionary scale to meet diverse requirements of massively scalable data centers, big data environments, cloud-based architectures or bare-metal deployments – with one evolutionary network: Unified Fabric.

These next-generation solutions lay to rest the myth of  “the good enough network”.  When a modest five-year  TCO is calculated (including CAPEX plus the cost of maintenance, labor, bandwidth and energy consumption), the Cisco advantage is clear. And when the value of Cisco’s unique Intelligent Automation capabilities are added, like implementing the newly launched Network Operations Automation Service, Cisco has a very compelling economic argument indeed.

To drive the point home, the real economics of networking reveal that for many organizations approximately 70% of network TCO is incurred after the initial equipment purchase. So why is this important?

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Partner Update: Fresh Batch of Cisco News in Less than Five Minutes

October 17, 2011 at 7:16 pm PST

As Andrew learned the hard way, doing your research before you make an investment pays off, whether you’re buying a car or equipment for your network.

In this episode of Partner Update, we explore total cost of ownership and why it’s the only true way to measure network costs. We also cover storytelling tips and methods learned from esteemed author and presentation expert Nancy Duarte (she created the presentation you see in Al Gore’s An Inconvenient Truth), our October 18 TweetChat with Nancy, our October 20 broadcast covering LinkedIn for B2B, virtualization technology news, Cisco’s own Edison Peres’ travels to speak with partners in South America, LEAP centers to help partners test out data centers, tips for solution providers, and much more. Whew!

Tune in for the latest partner news:

Keep reading for a text summary and list of links mentioned during Partner Update. Read More »

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Cisco UCS Servers, Blade Server Chassis and TCO, part 2

Cisco UCS Servers and Blade Server Evolution, part 1, as the title suggests, discussed blade server evolution and why Cisco UCS is a game changer.  Now let’s talk about what the implications are for blade server TCO (Total Cost of Ownership) and how Cisco Unified Computing System scales vs. legacy blade architectures.

Blade Server TCO and Scale

Scale is the crux of the problem that has historically been the barrier for blade servers to deliver on their initial promise.  Scale for I/O.  Scale for Servers.  Scale for Management.  Cisco identified these shortfalls in the traditional legacy blade architecture and came to the marketplace with an innovative, game changing redefined architecture – Cisco UCS.

As discussed in “part 1”, to move the bar for blade chassis, we to better consolidate I/O, management and scale.  Enter Cisco UCS.  Deliver everything at scale: servers and I/O and blade chassis and management etc.  Deliver a new design, rather than retreading an old dead end chassis ‘building block’ design.

Efficiency and Scale by Design

The requisite new design is what Cisco delivered. Cisco UCS is a variable chassis count, variable server count, variable I/O capacity, smart scaling architecture.

Figure 1 is the Cisco design, a converged I/O (FCoE – lossless FC and Enet combined) that scales.  It provides easy, efficient infrastructure scaling across:  multiple chassis, multiple servers, racks, rows and yes, it even includes the integration of rack servers into the solution.

Figure 1: Cisco UCS architecture – 10 x 8 blade chassis = 80 blade servers, 20 cables (add more I/O by simply adding cables – easy scaling)

Figure 2 is a Non-Converged legacy blade chassis I/O architecture. More = more… of everything.  More chassis to hold more blades is OK, that makes sense.  But more Switches?  More cables?  More points of Management?  More complexity?  Not too good.

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Why TCO is the Only True Way to Measure Network Costs

Cost always plays a big part in purchase decisions. It’s certainly a factor as I consider buying  a new car. As you’re well aware, purchasing a new car isn’t just about the initial cost. In my case, I’m considering reliability, speed (not that I need to go that fast carpooling my kids to school), mileage, and looks to a certain extent. (I just can’t bring myself to drive a minivan.) But what does buying a car have to do with your customers, or IT spending for that matter?

To put it simply, customers often cite initial cost as a big factor in their network decision-making, too. But if they are looking only at CapEx when purchasing new equipment, it’s the same thing as only looking at the initial cost of a car: They’re not seeing the entire picture.

Total cost of ownership, or TCO, is a better metric to assess network cost, because it considers the full impact on IT spend, including CapEx, services, labor, bandwidth, and energy consumption. And TCO is not just a measure of the initial expense, but of how much equipment will cost over its lifetime.

In June 2011, Cisco commissioned a third-party business consulting firm to analyze the true TCO of the network, comparing the quantitative costs of acquisition, support, labor, bandwidth, energy, and product longevity. The firm also assessed qualitative business benefits like network uptime, user productivity, and security.

The quantitative results alone show that a network built on Cisco’s architectural approach can yield up to a 13% better TCO, building a powerful business case for you to take to your customers about why the choice of networking gear matters.

Here are some facts drawn from the findings, which support Cisco’s firm belief that a strategic next-generation Cisco network architecture delivers superior value and lower TCO: Read More »

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