Nortel vs. Cisco: LAN and WAN Infrastructure Cost Comparison
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1 About this research note: Selection Advice notes offer clear guidance in effectively managing, optimizing, and expediting the product and service procurement process. vs. : LAN and WAN Infrastructure Cost Comparison Publish Date: January 30, 2008 Info-Tech recently conducted a five-year cost comparison of Networks and Systems LAN and WAN equipment. The results are telling, and the cost savings that enterprises can expect for products compared to products can be over 50%. Enterprises that default to when buying network equipment should expand their shopping choices the savings can be substantial Info-Tech Research Group
2 Executive Summary Cost is a measure that IT management typically scrutinizes closely when selecting technology solutions. The enterprise LAN and WAN infrastructure are no exception, and cost should be a primary consideration when selecting an equipment vendor. In an effort to help enterprise IT management understand the cost of leading LAN and WAN infrastructure products, Info-Tech has compared the cost of Networks and Systems LAN and WAN infrastructure. This research note compares the cost of several scenarios, including:» Small, medium, and large high-availability campus LAN configurations.» Small branch, mid-sized regional office, and large regional/head office WAN configurations.» Network performance, energy efficiency, and price discounting considerations. In every case six scenarios in all the cost of infrastructure is lower than, with cost savings ranging from 27% to 54%. Enterprises of all sizes should the evaluate equipment and support costs along with their own controllable costs prior to making a purchasing decision. Selection Advice 2 vs. : LAN and WAN Infrastructure Cost Comparison
3 Selection Point Info-Tech recently compared the CAPEX and ongoing support costs of LAN and WAN infrastructure from leading vendors Systems and Networks. The evaluation examines the following components:» List price (CAPEX) of various products.» Annual support and maintenance contracts (assumes 8x5 technical support and Next Business Day (NBD) advanced hardware replacement for and 24x7xNBD for. This is because does not have an 8x5xNBD support option, and does not have a 24x7xNBD option).» All prices are stated in US dollars. These are the costs that can be compared, and make the most significant difference in a five-year cost comparison. To address the difference in LAN size, and accurately reflect different products used in varying sized implementations, the following scenarios are compared:» A small 250 port LAN without Power over Ethernet (PoE) and with a High-Availability (HA) option used at the network core.» A medium 1750 port LAN with PoE and HA at the network core.» A large 3000 port LAN with PoE, Gigabit-to-the-desktop, and HA at the network core. Similarly, to address different WAN requirements and office sizes, the following scenarios are used:» 15 small branch offices requiring a maximum of 2 T1s for WAN connectivity.» 5 mid-sized branch or regional offices requiring a maximum of 8 T1s for WAN connectivity.» 2 large regional or head offices requiring a maximum of 3 DS3s for WAN connectivity. In all cases, product features and functionality are matched as closely as possible to ensure an applesto-apples comparison. Key Selection Criteria In each of the following six scenarios, a graph shows the cost elements over five years. The list of products can be found below each graph, as well as pricing details. Info-Tech believes this to be as complete and accurate as possible, and all assumptions have been disclosed. Selection Advice 3 vs. : LAN and WAN Infrastructure Cost Comparison
4 Scenario Comparisons Scenario 1: Small 250 User Campus LAN Figure User Campus LAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Product Lists Edge 6x Catalyst TC-L Edge 6x ERS 2550T Core 2x Catalyst C3750E-24TD-S Core 2x ERS 5530 Selection Advice 4 vs. : LAN and WAN Infrastructure Cost Comparison
5 Total CAPEX $45,960 $27,160 Maintenance & Support $15,700 $8,850 5 Year Cost Comparison $61,660 $36,010 Cost Saving 42% In this scenario, represents a 42% five-year cost saving compared to. Scenario 2: Mid-Sized 1750 User Campus LAN Figure User Campus LAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Selection Advice 5 vs. : LAN and WAN Infrastructure Cost Comparison
6 Product Lists Edge 37x Catalyst C PS-S Core 2x Catalyst 4506 Chassis (WS-C4506-E) 2x Catalyst 4500 Power Supply (Data Only PWR-C AC) 2x Catalyst 4500 Supervisor Module (WS-X45-SUP6-E) 2x Catalyst 48 Port Gb Module (WS- X4448-GB-SFP) Edge 37x ERS 4550T-PWR 10x46cm Resilient Stacking Cable Core 2x 8300 Series 6 Slot Chassis (ERS 8306) 2x 8301 AC Power Supply (DS1405A14) 2x Switch Fabric Module (ERS 8393SF) 2x 48 Port SFP Fiber Module (ERS 8348GB) Total CAPEX $326,275 $223,725 Maintenance & Support $110,420 $49,400 5 Year Cost Comparison $436,695 $273,125 Cost Saving 37% In this scenario, represents a 37% five-year cost saving compared to. Selection Advice 6 vs. : LAN and WAN Infrastructure Cost Comparison
7 Scenario 3: Large 3000 User Campus LAN Figure User Campus LAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Product Lists Edge 64x Catalyst C3750G-48PS-S 16x1 Meter Stacking Cable (CAB-STACK- 1M) Core 2x Catalyst Slot Chassis (WS-C6506-E) 2x Catalyst 6500 Power Supply (WS- CAC-6000W) Edge 64x ERS T-PWR 16x1 Meter Return Cable Core 2x 8600 Series 6 Slot Chassis (ERS 8006) 2x ERS 8000 Routing Switch SW Kit Selection Advice 7 vs. : LAN and WAN Infrastructure Cost Comparison
8 Product Lists (Continued) 2x Catalyst 6500 Supervisor Module (WS-SUP720) 4x Catalyst 48 Port Gb Module (WS- X6548-GE-TX) 2x Power Supply Unit (ERS 8005 PSU) 4x Switch Fabric Module (ERS 8692SF) 4x 48 Port Gb Module (ERS 8630GBR) Total CAPEX $1,118,280 $696,340 Maintenance & Support $401,640 $167,700 5 Year Cost Comparison $1,519,920 $864,040 Cost Saving 43% In this scenario, represents a 43% five-year cost saving compared to. Selection Advice 8 vs. : LAN and WAN Infrastructure Cost Comparison
9 Scenario 4: 15 Small Branch Office WAN Figure Small Branch Office WAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Product Lists 15x ISR 2801 (includes 2xT1/E1 WIC - WIC-1DSU-T1-V2 and Advanced Security Bundle - CISCO2801-SEC/K9) 15x SR 1002 (includes 2xT1/E1 Interface and Stateful Firewall) Total CAPEX $73,425 $37,425 Maintenance & Support $26,325 $8,625 Selection Advice 9 vs. : LAN and WAN Infrastructure Cost Comparison
10 Pricing Details (Continued) 5 Year Cost Comparison $99,750 $46,050 Cost Saving 54% In this scenario, represents a 54% five-year cost saving compared to. Scenario 5: Five Mid-Sized Branch Office WAN Figure 5. Five Mid-Sized Branch Office WAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Selection Advice 10 vs. : LAN and WAN Infrastructure Cost Comparison
11 Product Lists 5x ISR 3825 (Includes 4x2 Port WICs - VWIC2-2MFT-T1/E1 and Advanced Security Bundle - CISCO3825-SEC/K9) 5x SR 3120 (Includes 8 Port T1/E1 Medium Module and Stateful Firewall) Total CAPEX $94,475 $44,475 Maintenance & Support $29,925 $17,250 5 Year Cost Comparison $124,400 $61,725 Cost Saving 50% In this scenario, represents a 50% five-year cost saving compared to. Selection Advice 11 vs. : LAN and WAN Infrastructure Cost Comparison
12 Scenario 6: Two Large Regional/Head Office WAN Figure 6. Two Large Regional/Head Office WAN Cost Comparison Source: Info-Tech Research Group and pricing taken from respective Global Price Lists in effect on December 1, Product Lists 2x ISR 3845 (Includes 3xDS3 WIC - NM-1T3/E3 and Advanced Security Bundle - CISCO3845-SEC/K9) 2x SR 4134 (Includes 3xDS3 Medium Interface Module and Stateful Firewall) Selection Advice 12 vs. : LAN and WAN Infrastructure Cost Comparison
13 Total CAPEX $79,790 $58,140 Maintenance & Support $17,350 $13,080 5 Year Cost Comparison $97,140 $71,220 Cost Saving 27% In this scenario, represents a 27% five-year cost saving compared to. Performance, Energy, and Discounting Considerations The above scenarios compare the features and functionality of the products as closely as possible; however, there will be some differences in performance even in comparable models. For example, the performance characteristics of the SR 1002 allow it to fully utilize 2 T1 circuits (3.1Mbps) with Quality of Service (QoS), NAT and firewall enabled transmitting 64 byte packets, while the ISR 2811 utilizes only 29% of the 2 T1 circuits (0.9Mbps) under the same circumstances (Source: December 2005 Tolly Group Report). This can mean wasted WAN bandwidth, and wasted money. Assuming that a T1 circuit costs $500 per month, the ISR 2811 could be wasting as much as $710 per month in underutilized WAN services. With respect to energy efficiency, seems poised to take the lead in greening enterprise networks. In recent testing completed by The Tolly Group, the ERS 4548GT-PWR with RPS 15 used less than one-third (33%) of the power consumed by a Catalyst 3750E-48PD under full PoE load. Energy costs to operate enterprise LAN and WAN infrastructure will become a more significant component of cost evaluations in the coming years as energy costs continue to skyrocket. Purchasing more energy efficient products today will lead to a significant payoff in the coming years. In terms of discounting, it is no secret that nobody pays list price for LAN and WAN equipment. Discounts vary depending on the size of the spend, the vendor, and the reseller. To get an idea of what discounting looks like in the real world, Info-Tech compared the price of the two products evaluated in Scenario 1 above. When comparing the ERS 2550T and the Catalyst TC-L at online reseller CDW, the discount on the product is 23.9%, while the product is discounted at 34.1%. Given that the minimum five-year cost differential in the above scenarios is 27%, discounts would have to be 27% greater than in order to match the cost advantage. Selection Advice 13 vs. : LAN and WAN Infrastructure Cost Comparison
14 Recommendations Info-Tech consistently recommends that enterprises carefully consider lifetime costs prior to making purchasing decisions. In the case of LAN and WAN infrastructure, focus on the following cost drivers: 1. Up-front CAPEX is the largest cost comparison component. The cost of the equipment is, and will continue to be, the most significant contributor to overall costs. CAPEX typically represents over 80% of the five-year costs when using list pricing, so enterprises should closely scrutinize the up-front cost of the equipment. 2. Maintenance and support is not insignificant. Use caution when selecting vendor support plans. In this analysis, Info-Tech assumed support to be 8x5xNBD for and 24x7xNBD for, but premium support packages such as 24x7x4 On-Site (4 hour on-site hardware replacement) can be over 50% more expensive. 3. Power consumption is becoming a consideration. While LAN and WAN infrastructure does not consume power like servers and HVAC, as the price of energy continues to increase and as more PoE enabled devices are attached to the LAN, power consumption should be considered in purchasing decisions. In the near future it will become a larger component of the overall cost of ownership. Bottom Line Info-Tech recently conducted a five-year cost comparison of Networks and Systems LAN and WAN equipment. The results are telling, and the cost savings that enterprises can expect for products compared to products can be over 50%. Enterprises that default to when buying network equipment should expand their shopping choices the savings can be substantial. Info-Tech provides IT research and advice to more than 21,000 IT professionals worldwide. Our practical, actionable research is specifically designed to have a clear and direct impact on your organization. Info-Tech's products and services help our clients work faster and more effectively. Our research improves the IT decision-making process, expedites critical IT projects, and helps our clients keep current enabling them to achieve greater personal and corporate success. More About Info-Tech Selection Advice 14 vs. : LAN and WAN Infrastructure Cost Comparison
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