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Thinking about your network costs when your business is changing fast.

October 23, 2009 - 0 Comments

There’s a lot of pressure out there in the networking world.  IT budgets are being scrutinized at a time when business requirements are changing very, very fast.   Sometimes in this recession, the scrutiny feels like it’s coming from a previously friendly finance guy with a hatchet that’s telling you to buy the cheapest equipment possible, from any vendor you can find.  Although it’s uncomfortable to defend your IT budget, it can be even more uncomfortable to explain network downtime or congestion to upper management.

Nicholas Lippis, president of Lippis Consulting, recently published a white paper titled, “Navigating Network Infrastructure Expenditures During Business Transformations”.  In the paper, Lippis explores the strategy of buying the lowest cost equipment from different vendors and compares it to standardizing on strategic vendors.  Lippis finds that a mixed network vendor environment restricts design options, increases security vulnerabilities, and limits application performance — factors that ultimately drive up the cost of the network and makes it less flexible to the changing business environment.

Lippis offers the following recommendations:

  • Choose vendors that are financially stable, able to both withstand the recession and continue R&D investments;
  • Work with a single strategic vendor who understands your business requirements instead of multiple vendors;
  • Avoid low cost products for edge networks since these may drive up operational costs;
  • Look for high availability testing for an entire network and large-scale deployment validation;
  • Consider a single network platform approach for mission critical applications;
  • Consider device high-availability features and network design to deliver a reliable network.

The Lippis paper, which is available for free download, digs even deeper into the following concepts:

  • How mixed vendor networks drive up operational cost and reduce network availability;
  • Why the dual vendor strategy brings a lot of pain for little gain;
  • The case for a single vendor for high availability dual backbones.

According to Lippis, the benefits of a single vendor approach can be illustrated by looking at the total cost of ownership (TCO).  Typically, TCO is broken down as follows:

  1. Acquisition cost = 25%
  2. Operations = 40%
  3. Facilities = 35%

The largest component of operations is the human capital cost.  By building a mixed network the IT manager is increasing the complexity and thus the labor costs associated with dealing with equipment from multiple vendors. In a three minute podcast Nick Lippis discusses the negative impact of network complexity with examples of the US Customs and Border Protection Agency at Los Angeles Airport and the global Skype VoIP service. Lippis suggests that using a single vendor is the best approach from a cost, security, and availability perspective.  If you’d like more information, including a case study featuring JetBlue, check out the whitepaper here

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