Feeds

back to article Q: Just why are AT&T, banks snubbing kit from Cisco & co? A: Control

Relationships between big data-center buyers and IT providers are dramatic, and on Monday AT&T strode onto the stage and bellowed out a great betrayal. In an interview with the Wall Street Journal, AT&T's head of technology and network operations John Donovan was quoted as saying that the telco's Supplier Domain Program 2.0 " …

COMMENTS

This topic is closed for new posts.
Silver badge

A problem in the making...

Ok,

I'm not a Cisco fanboi or Cisco bigot.

But when we see these 'cut rate' programs get implemented to save money, they usually end up costing more in the long run.

I don't disagree that there are other kit manufacturers that are just as good and in some cases better than Cisco, however... the policy of just going to the lower cost provider opens the door to dodgy kit.

Its not Cisco, but the process.

While you may end up saving money on hardware. You may end up losing elsewhere. In terms of capabilities and training and support costs.

Just putting it out there... stop the madness of the bean counters. Focus on the QoS first.

7
1
Thumb Up

Re: A problem in the making...

Beat me to it, I got to agree and wonder how many routers are coming from country X or Y with a few undocumented features although one does wonder if cisco has had to do the same thing?

2
1

Re: A problem in the making...

Its not always easy to focus on QoS.

As much as I hate myself for saying there is always going to be a QoS to cost ratio that needs to be considered. If you can get a slightly inferior product in terms of feature or performance for 1/2 the cost then you are probably mad not to take it (usual disclaimers about product having to actually be fit for purpose etc)

Also I hate seeing training always brought up in these discussions. Training is a once off cost (per employee granted) but as long as you are locked into an expensive solution those hardware/support costs will keep reoccurring.

I guess what i'm saying is that due diligence should be performed where the bean counters have input to the decision process but not a controlling interest.

5
0
Silver badge

Re: A problem in the making...

Agreed.

... if you can find a company to equip you with software, and another to equip you with some hardware that can be built by multiple suppliers perhaps in tandem, you can shield yourself from economic wobbles, and don't have to face price increases.

And the money save won't go to waste! It will go on recruiting, paying, and training a fleet of people to manage that exciting, diverse supplier interface.

3
0
K
Bronze badge

Re: A problem in the making...

Training is NOT a one off cost, the company takes a hit for Training, Exam, Certification renewal and then usually staff will receive a pay-rise to go with it (to stop staff taking their shiny new skills elsewhere). Then if you are vendor-locked, you will be screwed even further as the cost for these 4 items is anything from 2-3x more expensive.

Don't get me wrong, I'm pro training, its an important part of a career and shows a company does invest in their staff - I just wish my current employee would have the same attitude!

1
0

Re: A problem in the making...

There may be multiple components to it but it is still a one off cost.

I've been lucky enough to get some good training in my career but it never came with a pay rise! I did get a pay rise after training once but it came with a new position/title/responsibilities so I don't think that counts

If the company is losing people after training them then I suspect the salary package wasn't appropriate to start with in which case the .

In the context of the article if you switch to a cheaper supplier then you may still be vendor locked but then you are with Cisco currently anyway.

1
0
K
Bronze badge

Re: A problem in the making...

Don't kid yourself - the reason most people get a pay rise is due to expense it would cost a company to replace them, this includes any investment in your training. So they will do everything reasonable, including giving you a pay rise and bonus to keep you around! If they don't, then you are in the wrong job.

2
0
Bronze badge
Meh

Re: A problem in the making...

@K haven't worked for a big multinational in colonies, or anywhere else have you ? Seen exactly that scenario multiple times involving very competent staff. As for Big Co (tm) comoditisation is a threat to all of them. Also a challenge for the customers as others have stated. Just don't expect intelligent responses to be the norm.

0
0
K
Bronze badge

Re: A problem in the making...

@Denarius, Nope I've spent my life in the SME sector, so can't really comment on the multi-nationals.

But I would say this - It doesn't matter who your employer is, if the company doesn't value you, then you are in the wrong job, grab all the benefits you can from your current role, then start searching for the next step on the career ladder. I'm lucky in that I'm a senior member of staff, I control the IT for our company, but I always try to ensure my staff feel valued and well compensated.

0
0
Anonymous Coward

What surprises me most about this article is the timing - that it's happened so late.

If you dig more into what Werner Vogels says about the shift to commodity and beyond, his key point is that when you compare server price and performance over time, it's predictable in it's decline. However when you apply the same logic to networking equipment, you see a totally different graph in terms of price per port over time.

I suspect it's taken quite some time for people to realise that you can move away from Cisco and get the same (or in some cases, better) performance for much, MUCH less.

When you start to think of how many hundreds of millions AT&T spend on equipment each year, it's really not surprising that they'd be interested in even a 5% cost saving exercise.

5
0
Silver badge

Of course we care

"if [Cisco] can put that same box with better performance and better programmability in your data center, cheaper than a white box out of Taiwan, do you care?"

Of course I do! Cisco cheaper than anyone!? That's one of the signs of the apocalypse!

6
0
Anonymous Coward

Read this - and follow the link the Credit Suisse report

http://www.businessinsider.com.au/source-cisco-1b-amazon-deal-led-to-insieme-sdn-2013-10

They're hosed.

1
0

Training? Just read a manual twice. We are talking basic networking infrastructure.

3
0

The price of complexity

Modern switches and routers are a full of unneeded features and those all cost lots of cash. Now that the chipsets are doing more and more of the real work, the only thing the vendors can provide is a stable environment for those chips and that means a minimal OS with only core features and a way for 3rd parties to provide the heavy lifting software. Sun, Apple and Microsoft all forgot that they are run the core stuff and others do their part and the greed only leads to messes.

0
0
DJO
Bronze badge

Re: The price of complexity

Modern switches and routers are a full of unneeded features

Not least of these "features" is the NSA tap which may or may not be present, better to have control and know there is not such a "feature" installed.

3
0
Bronze badge

"Commodity Networking Hardware": Another way to fund the executive bonus pool.

First off, I am NO FAN(boi) of AT&T, but this new mechanism to fund increases in the executive bonus pool is sheer genius.

Get your suppliers to fund it!!!!

If anyone out there thinks, even for one minute that AT&T will reduce their pricing to reflect their lowered equipment costs; then I have some swampland in Flori-duh I have for sale!!!!

IT WILL NEVER HAPPEN!!!!!!

All of this bullshit about cost controls is just crap to feed to the BoD and stockholders.

AT&T execs: "Look at all of the savings we will accumulate, so why shouldn't we participate in the savings?"

It will end up in the pockets of the execs. COUNT on it!!!!

0
1
LDS
Silver badge

Re: "Commodity Networking Hardware": Another way to fund the executive bonus pool.

I guess executive will also start to save on expensive office furniture, expensive travels for some business meetings always setup in nice resorts (no web conferencing through cheap switches and routers) and on expensive luxury cars to shuffle them around like IP packets... or I am wrong?

0
0
Silver badge

Re: "Commodity Networking Hardware": Another way to fund the executive bonus pool.

It won't lead to ticket-price reductions, but reduced costs mean that the execs get their shiny new cars with a slightly lower future price-rise, which does put pressure on the competition.

Maybe.

0
0

Interesting....

...Microsoft also reduced prices on OS licensing to woo low-end tablet manufacturers. I think Cisco is just coming back down to reality and noticing that people aren't necessarily selecting their stuff as the only choice anymore. Maybe this means no more insane list prices for basic network hardware? Naah...

The things I see Cisco, Microsoft, HP, etc. providing to businesses that they can charge a premium for are:

- Service and support

- A stable platform with a known release schedule that doesn't throw in the latest new cool thing just for fun

- A well-known product supported by many IT pros with a training and certification program to at least give you a starting point evaluating candidates

The problem with all these vendors is that these things have been watered down over time in pursuit of higher license profits. Cisco can't just keep commanding the premium pricing it does and not give businesses what they're looking for. Eventually even the execs start noticing.

My personal favorite with Cisco these days is that they ship equipment that's intentionally crippled until you pay for feature licenses. One set of SSL VPN license features I saw at work cost almost $25K for a piece of paper with a serial number on it...in addition to the actual hardware which was incredibly expensive for what it was. We haven't even started looking at the Cisco UCS server hardware yet just because we know it's going to be insanely expensive and require $$$ in ongoing maintenance contracts.

There is something to be said for having a source of trained individuals though...if that training program is decent. I work with a very niche-market systems management product from a very large enterprisey software vendor, and it is very difficult to find anyone who knows about the particular quirks of the product. It doesn't help that this particular vendor doesn't provide good documentation or even a product that can work out of the box with most environments, or that the core of the product is almost 20 years old and all the top-layer cool stuff is wrapped around a completely proprietary protocol stack from the 90s. If I were using something like System Center, there's Microsoft certified individuals who know the product, an active user community and easy access to help. Right now, our only source of help is the enterprisey vendor's "professional services" teams...groan.

2
0

Pricing vs value

The networking industry has had good margins for a long time. This isn't because of the hardware being intelligent or not (which is the wrong way to think about it btw). It's because there hasn't been much competition. The thousands of features that get deployed mean that the number of functionally equivalent devices for a particular spot in the network is small. With little competition, pricing stays high.

Things like SDN are important for two reasons: first, they reset the architecture to some extent, which reduces the power of all those legacy features, and second, it helps automate workflow. The first point increases competition (read: drives prices down). The second addresses the bigger cost issue: managing all the devices.

Ultimately, Cisco will drop their prices as competition heats up. They will be a player in the future of AT&T, just maybe not to the same extent they are today. But the real battle is going to be over long-term OpEx reduction. Merely making a cheaper switch doesn't really address that. If AT&T just wanted the same network they have today at lower prices, they would put pricing pressure on Cisco. That's not what this is about.

Mike Bushong (@mbushong)

Plexxi

2
0
Gold badge

Cannibalize your own products and services before someone else does it for you.

1
0

There is a pattern here

Microsoft-Cisco

1. It's well known that Microsoft are seeing their market share eroded due to a) Mobiles/tablets and b) cloud solutions.

2. Similarly/Consequently, SMEs are increasingly allowing their 'stuff' to be looked after in the cloud, so that they no longer control the technology strategy that was previously spoon fed to them by MSFT/Cisco.

3. Cloud people are technology experts that understand networks in just the same way that Mobile/Tablet/Server OS technology experts understand hardware & computer platforms (and in the same way that SME people often/generally don't), and are most definitely choosing their own technical strategies rather than having it spoon fed to them.

4. Even outside of big Cloud/Datacentre operations such as Amazon, the volume of data is now so high that technology experts are also forming enterprise strategies.

ergo, Cisco Lock In is lost in that same way as Microsoft's

0
0
Unhappy

Be careful of how WalMart does it

Let's lower prices every year! Let's push out the competition! Let's sell the cheapest stuff at the lowest prices, even if it means the stuff has to change its character, not just its price. Like the price point for a popular food item? Reduce the quantity in the box but don't change the box. Those dumb customers who buy by price alone won't know the difference. John Ruskin talked about this over a hundred years ago.

Go back to the 2006 articles about how Snapper stopped selling to WalMart, then look at the articles from the last year or so saying they're back. That is, lawn mowers painted Snapper red and with the Snapper name on the side are now being sold at WalMart. Check the labels--they don't come out of the Snapper factory in McDonough, Georgia, USA. Those are still at the authorized Snapper dealers.

Yes, it's possible the traditional suppliers are pricing their items higher than they need to. It's also possible the "commodity" suppliers are providing products that do the job well and for just as long at a lower price. But when anyone tells you, "You get what you pay for," remind them that's not a sure thing and sometimes you undeniably do NOT get what you pay for. But you're probably going to have to pay for what you get.

0
0
Anonymous Coward

I know why...

just saw a Dell networking (Dell-Force10) quote for our refresh. The Cisco price was more than twice the cost of Dell's proposal.

0
0
This topic is closed for new posts.