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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.'"
People who don't get competitive quotes but always buy Cisco because that's what they know.
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.
I bet Belkin could do the job for a cool 1 million. Of course it wouldn't work, but look at the savings.
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.
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.
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."
When our name is on the back of your car, we're behind you all the way!
What was the Huawei bid?
Only a fool would do an important networking job without monster cables. Do you know how much packet fidelity you can lose if stray RF gets into your fiber?
I'm not sure that was a real quote from Cisco. It looks to me like they simply didn't want the business. In such cases, business file what are called f-you quotes, which are outrageously priced to take into account that the bidder may not currently have the capability to fill the contract, or that it would be defocusing. Priced high enough, they could sub-contract to HP, for example, and still make a lot of money.
That said, I went to our local office the other day and poked my head into the networking closet. I see the same cheap crummy wifi routers I put there before our little company got bought. Right next to them is a Cisco router worth maybe $10-20K. It's worth more than all the computers and related hardware in the office combined.
Celebrate failure, and then learn from it - Nolan Bushnell
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.
I guess today is a passable day to die.
Wondering, was the offer directly from Cisco? Did the person who designed/selected the gear know what they were doing? ... e.g., we just had a project in which a company campus with something like 20 Gigabit switches (24/48 ports, access layer) and a core with 10G ability to feed to those as well as cover the DC with redundant 1G ports ... going with the usual suspect (6500) as core switch with line cards to supply up to 16 10G ports and 96 1G copper ports would have been more than twice the price than the alternative we chose, Nexus 5548 w/ two 2248 FEX chassis. ... (total of 44 SFP+, 42 SFP, with original Cisco SFPs that would add up to around 50k€ - would have been a third of the whole project budget. Using OEM/compatible modules was around 5k€). Assuming a large quantity of fiber ports in such a project, the optics alone may quickly add up to the factor mentioned above ...
Just by selecting the wrong gear, prices between different Cisco gear can already differ by a factor of 2-3
Also, instead of using overpriced (to say the least) Cisco SFP/SFP+ modules would have run the total bill up even more
You mean features like storing data and dishing it back out; or nonsense features like CPLM5 certification?
Plus you are comparing corporate Oracle to Corporate SQL. For most people all Free and Open Source would be just peachy. Most people including facebook. I rarely see the really big big big sites doing anything with any of the Oracley Microsofty IBMy stuff. They usually take Open Source and then roll their own. Sort of shows that the route to success starts with open source and ends with modified open source.
It's very possible. If you read the RFPs for some government things, you'll find things that almost no vendor can possibly adhere to. If you are a top tier vendor like Cisco, you likely CAN meet the requirements, but not cheaply. So instead of trying to compete on price, you compete on being able to fulfill all of the requirements in the RFP. You take the gamble that the people analyzing the proposals will nix the cheaper ones as non-compliant, and you are the only bidder left. Or, that the agency will cancel the RFP and rewrite a new one with different or clarified requirements. Then everyone rebids with full knowledge of each others' pricing, and hopes for the best.
America spends more per capita on its schools than any other nation in the world.
Actually, we rank fourth
And on a percentage of GDP basis>/a> The US ranks 37th, tied with Estonia.
No, no, you're not thinking; you're just being logical. --Niels Bohr
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.
Actually, Forth kind of sucks. I prefer LISP.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
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I live in Seattle, you insensitive clod!
There's no place I could be, since I've found Serenity...
I'm not sure that was a real quote from Cisco. It looks to me like they simply didn't want the business.
Not really, looking at the spreadsheets, it's typical pricing for Cisco. Especially once they started quoting Nexus-backed infrastructure with OTV to stretch layer-2. You'd be surprised at how many people have been biting off on massive OTV and Nexus costs with no competitive analysis. Looks like Cal State just did an objective analysis without marketing hype, and kudos to them.
I have to completely agree with this. I've been involved with several large-scale RFPs, and this is exactly how it goes. The only thing I'd add is that like clockwork, any party that doesn't win threatens to sue someone. It happens every time. They must be teaching this in business school or something. I've never seen a more childish group of people.
Just look at West Virginia's last big IT project and you'll see how Cisco stays in business.
A similar situation also happens (although I have no idea if it happened in this case).
The "preferred" vendor "assists" in writing the RFP. They get it written so they can fulfill it economically while competitors can't. Sometimes this is done by specing features missing from competitor's product or insuring competitors have to spec higher end products to pick up one "required" feature that the "assisting" vendor just happens to include in a lower priced model.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
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.
The road to tyranny has always been paved with claims of necessity.