Cisco Pricing Undercut By $100M In Big Cal State University Network Project

alphadogg writes "The $100 million price differential between the Alcatel-Lucent and Cisco proposals to refresh California State University's 23-campus network revealed earlier this week was based on an identical number of switches and routers in various configurations. CSU allowed Network World to review spreadsheets calculating the eight-year total cost of ownership of each of the five bidders for the project. 'Everybody had to comply with this spreadsheet,' said CSU's director of cyberinfrastructure. 'Alcatel-Lucent won the project with a bid of $22 million. Cisco was the high bidder with a cost just under $123 million. Not only was Cisco's bid more than five-and-a-half times that of Alcatel-Lucent's, it was three times that of the next highest bidder: HP, at $41 million.'"

Comments

Cisco what?

[EmperorOfCanada]

I have always felt that Cisco had the same sort of following as Novell. Senior IT people certified up the wazoo yet unable to explain to me why Cisco was so much better. The bits that leak out of big data people like Facebook and Google seem pretty lacking in the big names. I don't see gear from HP, IBM, Dell, Cisco, etc. What I do see is white boxish or custom gear that they seem perfectly happy with.

Just a guess but my bet is that much of the business that big old companies like Cisco come from single skill IT people combined with kick ass sales people. Salespeople who sell to upper management not to the non Cisco IT people who might fact check.

So good job to the people who didn't blow an extra $100 Million.

Re:Cisco what?

[kqc7011]

Sometimes a company will place a extremely high bed because they really do not want the contract. But they have to bid to stay on the list for future proposals. And if they do get the bid all they have to do is sub it out to a lower bidder and keep the carry.

Re:Cisco what?

[Revotron]

It's not a typo. Google's entire data model is designed around "cheap and disposable" instead of "expensive and bleeding-edge." The general notion is that they can get 10 custom-built consumer-grade systems for the same price as one enterprise-grade server, and have more processing power and better uptime by distributing their workloads to avoid single points of failure.

That's why they use consumer-grade SATA hard drives. If one breaks, they let it sit there until their next walk-through. Meanwhile, the load is distributed onto a bunch of other similarly-inexpensive servers. You'd be surprised how long an el-cheapo hard drive can last when it never stops spinning.

I have a feeling if Google deployed 10GbE to each server, they'd probably double their hardware costs.

Re:Cisco what?

[djlowe]

Hi,

I'm going to get pounded for this post, but that's OK - this is a subject with which I am familiar, and I'd like to share my perspective nonetheless.

I have always felt that Cisco had the same sort of following as Novell. Senior IT people certified up the wazoo yet unable to explain to me why Cisco was so much better.

Your current "+5 Insightful" upmods notwithstanding, the fact that you need someone else to explain this to you tells me that, by your own admission, you don't have the knowledge required to make these decisions yourself. That alone makes me wonder why your post got upmodded... but, this is Slashdot in the 21st century, so what can you do, right?

If you had the requisite knowledge, I imagine that you'd be posting from that viewpoint, e.g. "I evaluated Cisco's offerings for my company, and after comparing them to other vendors, decided that they weren't worth the premium price for us." Or something similar, rather than stating: "I have always felt that"... this isn't something subject to feelings. IT/MIS is a technical profession, and cost/benefit analysis with regards to network and computer infrastructure is something that is done every day in the real world, though apparently not by you.

The bits that leak out of big data people like Facebook and Google seem pretty lacking in the big names. I don't see gear from HP, IBM, Dell, Cisco, etc. What I do see is white boxish or custom gear that they seem perfectly happy with.

What you don't appear to understand is that Googles and the Facebooks of the world are basically large enough to be OEMs (Original Equipment Manufacturers) in their own right, and have the money and technical resources to pursue that path, and so your attempt to apply their approach to this particular case is flawed. Certainly CSU is large, but they aren't "Google large", when it comes to network infrastructure and servers, and you'll note that they went with a name-brand vendor, rather than rolling their own solution, which makes your statement doubly inane.

Just a guess

You appear to be good at that.

but my bet

What bet? How much? What are the terms? I'm sorry to sound confrontational, but you do realize that such is a null statement? It costs you nothing to say, and there's no penalty if you're wrong. Why not replace it with something more honest, such as "I think that", or, better, in your case: "I believe that"?

much of the business that big old companies like Cisco come from single skill IT people combined with kick ass sales people.

Actually, much of Cisco's success, and sales, come from corporations with mission-critical networks, regardless of scale. They pay a premium for Cisco's hardware, and pay for SmartNet contracts, to ensure their network operations. This may not be worth it to you, but, I have to tell you, their support and logistics when it comes to SmartNet are amazing, and "4 hour parts on site"? The last time I opened a Cisco TAC case for a device so covered, I had a callback in 10 minutes from the person assigned to the case, parts dispatch was under an hour, and the longest delay was on our side: The person that was on-call to open the office (It was a Sunday) didn't answer her cell on the first try, and I left a message with the engineer's cell number, and called him back and gave him her number so he could call her directly to arrange to meet at the office. Once he got onsite, I emailed the backup copy of the router config to him, and he took care of the rest.

Total time was just over three hours, and the following Monday morning everyone came to work and the network was working.

THAT, in my opinion, is worth paying for, when needed, as it was in this case: That office is in Washington State and I'm in New York State.

Now, many companies don't need that, and that's fine. And, based just

Re:Maybe raising taxes isn't the only solution.

[The Master Control P]

The idea that American schools don't have enough money is absurd. America spends more per capita on its schools than any other nation in the world.

Now, that all that money is not correctly distributed among schools is clear too. And far more important than that, all the money in the world doesn't matter if mommy and daddy don't encourage and take part in junior's education. Which in makes marginal investments in failing schools pointless, because it's the entire environment of the district that's failing the students, not just the school.

I wanna see the final cost

[hawguy]

I wanna see the final cost after the project is done and everything is working.

$22M sounds low for a project this of this size, so I wonder if Lucent is planning to make up the difference with consulting fees.

Or maybe I'm just jaded from paying Cisco prices for so long... and also from seeing low-ball bids costing a lot more in the end.

Re:I wanna see the final cost

[imikem]

This. A disparity this size suggests there is more to the story. Cisco is expensive, yes, but Lucent isn't free. Hard to see how they intend to make money on the project.

What Cisco brings to the table is their support organization. If you spend as much time with networking as I do, responsible for upwards of fifty switches, multiple firewalls, IPS, wireless, etc., you learn to appreciate being able to open a case and get a knowledgeable person on the line inside of 15 minutes, and replacement hardware next day without jumping through hoops.

I've tried HP and Dell network hardware at various times, and came away unimpressed. Servers sure, but they should stick with that IMO. Haven't dealt with any Lucent gear since 2000 (some modem aggregator IIRC), so can't speak to them directly.

Re:And?

[sribe]

Cisco is like Oracle. They don't need to discount their prices.

Eh? Oracle discounts, heavily. You only pay "list" to Oracle if you're a small, unimportant customer. The big fish get up to something like 99% off when Oracleewants to lock out a competitor.

Re:I knew cisco was expensive

[camperdave]

but holy shit! how do they stay in business?

With luxurious profit margins. As the saying goes "A fool and his money... that's who you want to focus on."

Re:I knew cisco was expensive

[Joce640k]

There's a lot of PHBs who find Cisco to be "reassuringly expensive".

A bit like Oracle, et al.

Re:Maybe raising taxes isn't the only solution.

[Joce640k]

Sure, but doesn't most of it go on luxuries and fancy facilities to attract students rather than actual teaching?

Sports facilities better then most professional teams, plasma TVs in every dorm room, etc.

Re:I knew cisco was expensive

[WillerZ]

It's worth more than all the computers and related hardware in the office combined.

Debatable. It cost more than all the computers and related hardware in the office combined for sure.

Re:I knew cisco was expensive

[erroneus]

No. That's not true. It takes brain power. There's a wealth of information out there because pretty much, it has all been done before in one form or another.

It seems cheaper in the short run to buy something off the shelf and put it up. But when you keep paying for it over and over and over again, you might begin to realize that people are cheaper in the long run.

Besides that, do you think the likes of Google STARTED out with billions of dollars? How about Facebook and the others like them? They started with some pretty smart people which turned out to be a far better investment than paying for licensed off-the-shelf stuff.

Re:I knew cisco was expensive

[Anonymous Coward]

>You could argue the same for why buy Unix and Oracle when there's Microsoft Server and SQL. The answer is because the expensive one actually has some features.

You don't know what you're talking about. Most companies buy from vendors because they need someone to blame or they just want to pay high paid consultants rather than investing in an actually qualified IT team. Usually its mainly to blame the vendors.

exactly.

[Anonymous Coward]

You either pay for the brainpower upfront with pre-configured hardware/software, or make up the difference with smart (but expensive) people. The trick is which lasts longer, or is a better long-term investment.

I could employ a crappy IT admin who only knows windows, and pay him $40k and the enterprise Win suite and license seats for $20k total; or a decent linux admin at $60k and virtually unlimited server and seats running CentOS and Ubuntu for $0.

This is of course a very simplified way of seeing things. There are many more variables to consider, such as how competent is the end-user with computers?

Re:exactly.

[Bacon Bits]

The real difference is that at the end of the year, with MS, you still have closed software being managed by a mediocre admin and are pretty much limited to what the vendor wrote in the software and what your admin can find on google.

With the second option, you've still spent $60k, but you started with a much higher level of base competence and things usually go up from there. At the end of the year you have many more options and much more flexibility in what you're capable of, IT wise and business wise, with that higher level of competence.

The logic of this argument is quite common here on Slashdot, and that logic always escapes me. Everybody seems to acknowledge that a talented Linux sysadmin costs more than a mediocre Windows sysadmin. What I fail to understand is why a business is only presented with those two options. In reality, a business cares about money first and foremost. And the cost of your salary is usually quite a bit more than the cost difference between Windows Server and Red Hat Server. The reality is that a business is going to choose between a talented Linux sysadmin and a talented Windows admin (because they're willing to pay for talent) or they're going to choose between a mediocre Linux admin and a mediocre Windows admin (because they're not).

Slashdot seems to think there's no such thing as a talented Windows administrator. That's complete and utter bullshit. The concepts of administering Linux are not significantly different than those for administering Windows. I would go so far as to say that if you're unable to secure and manage a Windows network, you shouldn't be a sysadmin at all on any operating system. Windows is easy to administer. You read and reference the Resource Kit, research and follow best practice, and you will be absolutely fine. Just like on Linux. If you cannot do these things as a sysadmin, please quit your job. You're making the rest of us look bad.

The argument is like saying, "well, the average COBOL programmer costs quite a bit more than the average C programmer... clearly we should go where the talent is and program in COBOL!"

I also find it completely baffling that Slashdot seems to think that because you go with Linux, the business software you're going to run will use open source, too. More than that, that just because you hired a talented sysadmin you also hired a talented software developer. In my experience, sysadmins make horrible software developers because they do not develop robust solutions that adhere to development best practice. You end up with buggy, badly performing, un-maintainable software that may or may not function correctly. Similarly, software developers make horrible sysadmins, because they constantly do things that make their system work and compromise the integrity of everything else. You end up buggy, badly performing, un-maintainable computer systems that may or may not function correctly. The mindsets required to properly do software development and system administration are entirely different, and to do anything well requires focus and dedication. I would not look for the same talent in the same person any more than I would look for a writer to also be an editor, or an actor to also be a musician. Yes, it can be done, but generally it is the exceptions that prove the rule. Once a person chooses one path, they seldom cross to the other again.