Our neighbors in Palo Alto have been making a lot of noise about the difference in price between Hewlett-Packard and Cisco networking equipment. They’d like customers to believe they can offer similar capabilities to Cisco but at much lower prices—“Cisco for less,” if you will.
Most folks understand that the first part of that claim isn’t true. They’re not Cisco. To start with, when a company spends just 2% of revenues on R&D (as HP does), it isn’t capable of generating the type of innovation that a company spending 13% can (as Cisco does). We explained how Cisco innovation delivers differentiated capabilities when we debunked the myth of the ‘Good Enough’ network.
But some customers still ask me about the price difference—the “for less” part. After all, everyone is looking to cut costs, right?
Did you know that when building an enterprise IT network about 20% of a typical budget is spent acquiring hardware, while a whopping 80% goes toward operating costs?
In this week’s installation of the Myths of the Good-Enough Network series, Mike Rau delves into one of the common mistakes customers make when building an enterprise IT network; simply focusing on acquisition costs. Mike points out that only looking at acquisition and maintenance costs ignores the increased productivity and the reduction in downtime that next-generation networks can provide. You may have initially saved by choosing the “good-enough” network; however those savings can quickly evaporate with an increase in operating costs.
When purchasing a phone you wouldn’t only consider the out-the-door cost, you would take into account the carrier’s network, services, and technical support when making your decision. Why not do the same with your enterprise IT network?
Sound logical? Head over to Silicon Angle to read the full article and find out why a tactical “good enough” network can quickly become the more expensive option.
When your customers are shopping around for the right network, it’s a bit like being on “The Dating Game.” For those who aren’t familiar with the TV show, it first aired in the 1960s and featured an eligible bachelor or bachelorette hidden behind a wall. Said bachelor or bachelorette got to interview three candidates to find out which one would be most appropriate and worthy of a date. The candidates could not see each other so had to rely on the person’s answers to determine the best fit.
Customers looking for the right network may feel like the eligible bachelorette or bachelor on “The Networking Game.” Is contestant number one trustworthy and able to meet both current and future needs? Does contestant two offer security and flexibility? What about three: is that one stable? Can one network meet really meet all of those needs?
There are quite a few variables to consider when customers are shopping for a network, especially when 20% of a typical enterprise IT network budget is spent acquiring hardware while a whopping 80% goes toward operating costs.
Yet some industry pundits and vendors look only at acquisition and maintenance costs when calculating TCO, ignoring functionality that may improve productivity or business opportunities that are lost when the network goes down. That’s a bit like choosing a date based on a single factor, like a voice, rather than looking at the entire package.
We continue our coverage of the “Good Enough Network” myth series with myth #6: Acquisition Cost. Read More »
There is a debate raging in the IT industry about the role of the network.
In the same week that a gaming company’s network was hacked and the personal information of 60 million customers was leaked, there is a debate raging about whether the network matters.
In the same moment that the iPad is being adopted by 65% of the Fortune 100 — obliterating conventional wisdom about how corporate networks support consumer devices and mobility —there is a debate raging about whether the network matters.
On one side we have newcomers to the networking industry and some industry commentators who believe that the value of a network should be determined only by the cost of its components. They argue that customers should focus squarely on acquisition cost, not the value of their network assets. They argue that customers should focus on capital cost, not network capability and innovation. They believe the network has become a utility; that ‘good’ is good enough.
We all understand that negotiating the best price for goods and services always makes good business sense. But this debate is about more than that.
The debate is about making a choice between a tactical network where getting the lowest possible price up front is paramount – and a strategic network investment that enables customers to adapt quickly to new business imperatives and to handle the increased demands on their business.