February 28, 2012

The Total Economic Impact™ Of Cisco Catalyst Access Switches

Cisco commissioned Forrester Consulting to examine the total economic impact and potential return on investment (ROI) enterprises may realize by deploying Cisco Catalyst Access Switches. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cisco Catalyst Access Switching on their organization. For this study, Forrester conducted interviews with five existing Cisco customers and completed an online market survey of 104 senior network managers. The analysis showed that operating expense (opex) contributed up to 70% of total cost of ownership (TCO), which is combination of upfront capital costs and operational costs incurred during the life cycle of the switch.

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While the obvious benefit of this paper is the presentation of a business case involving real users of the switch, perhaps the even more important benefit is the fact that this provides a template that you can use to apply to your own situation.

In addition to presenting survey results from a large group, five specific (yet unidentified and chosen by Cisco) organizations were interviewed, including a European university, a large US-based energy company, a large US financial institution, a global manufacturing company, and a large US school district.

I would be particularly interested in hearing from our community about the extent to which your own economic analyses mirror and/or differ from the methodology used here.

I think Cisco products in general are far expensive yet, people go out and purchase them without realizing the impact of the finance...if you are are not able to maintain Cisco environment after purchasing their Cisco gear, then your investment have simply gone down the drain...Cisco products are very costly to own and to maintain as well..however, Cisco products are just like any other equipment that you purchase from other vendors...there are far cheaper switches, for example, that you can purchase but they do not cost as much...Juniper is just like Cisco. However, I like Cisco products for their easy use...but this does not mean that we have a big bundle...not everyone can afford to own Cisco Switches...

Hi Isam, Some Cisco Switching products may have a higher acquisition cost (CapEx), however, the operating cost (OpEx) is much lower. Therefore, the overall Total Cost of Ownership (TCO) comes out to be lower. That’s the assertion this paper is also making based on real-world experiences of Cisco customers.....the paper shows that based on this overall TCO model, Cisco switching products can provide up to 14% lower total costs.
Pradeep Parmar, Switching Marketing Manager, Cisco Systems

To follow up on Pradeep's point, Catalyst switches have a whole bunch of embedded, automated tools that, if you're the right-profile organization, improve operations and, in some cases, preclude you from having to buy other tools (like probes/sniffers). The integrated tools generally aim at helping lower TCO with operational efficiency. There's a comprehensive explanation of these tools - collectively called "SmartOperations" - in a paper Cisco recently posted at Webtorials.

Will SmartOperations make a difference for everyone? Honestly, probably not. If you're a smaller company and all you need are the basics, the value-added tools may go unused and you might as well go with a bare-bones, bare-price switch. If you are larger and greatly in need of operational automation, however, it's worth taking a look - sometimes the apples-to-pomegranates comparative switch evaluations are deceiving.

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