Cisco Pricing Undercut By $100M In Big Cal State University Network Project 220
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.'"
Re:I knew cisco was expensive (Score:5, Interesting)
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.
Who wrote the offer? (Score:5, Interesting)
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
Re:I knew cisco was expensive (Score:5, Interesting)
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.
Re:I knew cisco was expensive (Score:5, Interesting)
Re:And? (Score:3, Interesting)
They're doing this because Mark Benioff is Larry Ellison's ex-protoge, and their relationship took a turn for the worse and now they're in a gigantic dick measuring contest. Goes something along the lines of this-
Benioff (Presents Steve Jobs Style) "We are the original cloud, there's 'no software' and it's all a 'social enterprise"
Larry (Presents Balmer Style) "We do cloud too, and we're Oracle, so fuck you".
What a bunch of wankers (worked on SFDC and Oracle)
Re:Cisco what? (Score:5, Interesting)
Unable to explain to me why Cisco was so much better
There are some advantages to going "All Cisco", similar to the advantages of going "All Microsoft" or whatever:
- Huge pool of highly trained talent to pick from. Cisco certified people are easy to get, at both the low end and the high end.
- Good consistency in their products. Excluding their most exotic stuff and the cheapest consumer stuff, pretty much everything Cisco makes uses IOS or is IOS compatible to a degree that you can't tell the difference. You learn it once, and that's it, you know all their products.
- Complete product line. You can start with an entry level firewall and router, and upgrade to multi-terabit telco grade routers without ever having to throw out your knowledge or tools and start over. If it's a digital cable that you can plug into a router, Cisco almost certainly sells a module for it. If they don't, someone sells a compatible one.
From what I've seen, their competitors try to undercut them on price, often successfully, but then the IT department needs two or three vendors to meet all their networking needs. For example, Cisco sells blade-chassis IO modules (integrated switches), and even VMware vSphere "virtual switches"! If you have VMware on HP Blades (very common), then you either go Cisco, or live with the inconsistency. A lot of vendors will sell switches and routers, but not firewalls, VPN concentrators, WAN accelerators, or something. Suddenly, you need IT guys trained ina bunch of vendors' network equipment, you need three different management and monitoring tools, and your op-ex is through the roof. When you call support with a problem, the vendors will all point at each other, and meanwhile your links are down and your users are screaming at you.
On the other hand, $100M seems a bit much, even for Cisco. Sounds like they put a half-assed effort into the bid, and didn't pick the most cost-effective devices or just didn't give the right educational discount or something.
Facebook and Google seem pretty lacking in the big names
They're special, and aren't even remotely representative of a typical business. The way they build infrastructure has more in common with supercomputer design than business data centre design. For example, Google was using 100 Mbit switches when everyone else was starting the upgrade to 10 Gbit!
Re:I knew cisco was expensive (Score:4, Interesting)
That's a fact. It moves data in a highly standardized way. Sure, there are some proprietary Cisco protocols here and there, but for the most part, it's all the same everywhere. Whatever Cisco does, anyone can do.
People somehow believe there's magic moving data over wires. There just isn't. And there's nothing special about Cisco's. Now, compare Cisco to Microsoft. Now *There* is some vendor lock-in. One thing depends on another thing and another thing and another. To move off of Microsoft is mind-numbingly ridiculous to imagine. But Cisco? Nah. You can replace this and that here and there and you'll be just fine. Sure, you might have to migrate away from the use of anything Cisco proprietary here and there, but for the most part? You can take your time and move bits and pieces here and there.
That doesn't quite count if you're talking about Cisco phones... that's kind of an all or nothing scenario there... within limits. One thing is certain though -- Cisco needs to be humbled.
Re:I knew cisco was expensive (Score:2, Interesting)
But you have to understand that there is a quality difference, and a quite substantial one at that. Cisco's gear, while far from perfect, is massively better than any Alcatell-Lucent stuff. Alcatell-Lucent makes one-off routers. They make it, they ship it, they never look at it again. So if you find your bgp crashes every 2 days ... that just becomes a fact of life (I actually replaced bgp peering on an alcatell with a firewall rule redirecting any bgp sessions to a quagga daemon running on linux, which then ibgp peered with the alcatell. This was actually more robust than their own implementation).
I've seen plenty of linux setups doing the same (network/firewall) job as cisco gear, hell I've even seen a freebsd setup that used pf as a replacement for missing routing features in the freebsd kernel with millions of rules total (which worked), but all those setups did have something in common : horribly hard to figure out what they were doing, and the vast majority of them were configured by admins without a clue of networking. This meant obvious holes, and even when it was done competently, made the setup as a whole trivial to ddos. (my remote-bgp solution for the alcatell monsters was one such thing : attack port 179, play around a bit with packet ttl's and the whole network would die. Nobody ever figured that out though).
Cisco's hardware routers, properly configured, are unddossable. The same cannot be said for their firewalls though.
What I'm saying, as a network admin : please, please, please don't install cheap "one-off" equipment as a supposed replacement for quality hardware. And if you do, expect to be quoted at least $100/day more than everybody else for consultancy to fix the mess, and expect it to take a month longer than normal (that still may make cheap network equipment worth it, though do remember than having your network offline every 30 minutes for a month is bound to make customers extremely unhappy, and more consultants won't help). Not because it's not cisco (juniper is fine, though even more expensive).
Re:I knew cisco was expensive (Score:5, Interesting)
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.
Re:Cisco what? (Score:4, Interesting)
Right. But you forgot to mention that they have developed on their own and implemented a very custom software stack.
Not every enterprise out there has the development staff that google does to create such a software layer to be able to commoditize the hardware layers.
Take any established company. Kaiser Medical, Caterpillar, JPMC... while they may have solid IT staffs, the company's core competency is not IT. It's Healthcare, Industrial Machinery or Financial Services. So for them paying for EMC storage or IBM mainframes or Cisco routers and switches is worth their time and money. So they can focus on their core business.