Chris Kranky

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Network equipment prices going down

Chris KoehnckeChris Koehncke

The business of moving bits has clearly become a commodity, much to the chagrin of Cisco. I can’t help but imagine the sales messages they must be delivering as they fight what is obviously a losing battle.

We’re in the midst of launching a small ASP business and we needed a handful of Layer 3 devices.  I sat down with my engineer to try and map out the budget for these devices. The conversation went something like this. We could buy brand-new Cisco Catalyst boxes for about $6,000 each. OK – I wrote that down. OR he quickly said, we can get them refurbished for about $3,000. I quickly scratched the $6k for a $3k unit.

But that wasn’t enough, he said that Dell had some L3 switches with similar specs that we could get new for $3k. I quickly changed the DESCRIPTION from Cisco to Dell.

Obviously, my engineer was on a roll, he then said that Netgear had pretty much the same stuff for about $1,900. I realized I probably was going to need a pencil to keep up with this as I marked both the price and description again.

So in the course of a 10 min conversation, we went from $6,000 per unit to $1,900 saving effectively 66% of where we had started for what my engineers says will get the job we need done. Cisco no doubt is advocating superior support, better quality and and and, all of which reminds me of the same message I got from General Motors when Japanese cars first arrived. Do you see how this story might go?

Well the L3 switches we need are scheduled to arrive next week, my engineer let slip that he managed to find the Netgear boxes we wanted on the used market and the price, well, $400 each.