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Cisco Pricing Undercut By $100M In Big Cal State University Network Project

Soulskill posted about 2 years ago | from the added-an-extra-zero dept.

Networking 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.'"

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I knew cisco was expensive (1)

Anonymous Coward | about 2 years ago | (#41791643)

but holy shit! how do they stay in business?

Re:I knew cisco was expensive (5, Informative)

tdelaney (458893) | about 2 years ago | (#41791681)

People who don't get competitive quotes but always buy Cisco because that's what they know.

Re:I knew cisco was expensive (0)

alphatel (1450715) | about 2 years ago | (#41791775)

You could argue the same for why buy Unix and Oracle when there's Microsoft Server and SQL. The answer is because the expensive one actually has some features.

Re:I knew cisco was expensive (4, Interesting)

EmperorOfCanada (1332175) | about 2 years ago | (#41792083)

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.

Re:I knew cisco was expensive (-1)

Anonymous Coward | about 2 years ago | (#41792197)

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.

Yeah, if you have billions of dollars in the bank and tens of thousands of servers to spread your development costs across.

Re:I knew cisco was expensive (5, Insightful)

erroneus (253617) | about 2 years ago | (#41792477)

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.

Re:I knew cisco was expensive (1, Insightful)

Anonymous Coward | about 2 years ago | (#41792491)

>You could argue the same for why buy Unix and Oracle when there's Microsoft Server and SQL. The answer is because the expensive one actually has some features.

You don't know what you're talking about. Most companies buy from vendors because they need someone to blame or they just want to pay high paid consultants rather than investing in an actually qualified IT team. Usually its mainly to blame the vendors.

Re:I knew cisco was expensive (4, Interesting)

WaywardGeek (1480513) | about 2 years ago | (#41791999)

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.

Re:I knew cisco was expensive (4, Insightful)

WillerZ (814133) | about 2 years ago | (#41792027)

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.

Re:I knew cisco was expensive (5, Interesting)

swalve (1980968) | about 2 years ago | (#41792119)

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.

Re:I knew cisco was expensive (-1)

Anonymous Coward | about 2 years ago | (#41792121)

Yeah, great idea! Let's submit a f-you quote to a government agency that is subject to multiple watchdogs and freedom of information laws! No way that number's gonna become public and make every government agency with a Cisco contract think, "Holy shit, Cisco's robbing us blind!"

Re:I knew cisco was expensive (4, Informative)

calmdude (605711) | about 2 years ago | (#41792789)

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.

Re:I knew cisco was expensive (3, Interesting)

erroneus (253617) | about 2 years ago | (#41792427)

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 (4, Insightful)

camperdave (969942) | about 2 years ago | (#41791829)

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."

Re:I knew cisco was expensive (2)

notgm (1069012) | about 2 years ago | (#41791867)

by winning more than a fourth of the contracts that ALU wins.

Re:I knew cisco was expensive (3, Insightful)

Joce640k (829181) | about 2 years ago | (#41791953)

There's a lot of PHBs who find Cisco to be "reassuringly expensive".

A bit like Oracle, et al.

WOW! (0)

zerosomething (1353609) | about 2 years ago | (#41791651)

That's all I could think of.

Maybe raising taxes isn't the only solution. (-1)

Anonymous Coward | about 2 years ago | (#41791669)

Mr Moonbeam,

Perhaps there ARE other reasons we don't have enough money in our schools, besides the simple "you need to pay more taxes!"
You should look into that.

Re:Maybe raising taxes isn't the only solution. (2, Insightful)

The Master Control P (655590) | about 2 years ago | (#41791753)

The idea that American schools don't have enough money is absurd. America spends more per capita on its schools than any other nation in the world.

Now, that all that money is not correctly distributed among schools is clear too. And far more important than that, all the money in the world doesn't matter if mommy and daddy don't encourage and take part in junior's education. Which in makes marginal investments in failing schools pointless, because it's the entire environment of the district that's failing the students, not just the school.

Re:Maybe raising taxes isn't the only solution. (2, Insightful)

Joce640k (829181) | about 2 years ago | (#41791967)

Sure, but doesn't most of it go on luxuries and fancy facilities to attract students rather than actual teaching?

Sports facilities better then most professional teams, plasma TVs in every dorm room, etc.

Re:Maybe raising taxes isn't the only solution. (0)

Anonymous Coward | about 2 years ago | (#41792125)

What college gives their students TVs, let alone plasma TVs? I clearly went to the wrong schools for undergrad and grad.

Re:Maybe raising taxes isn't the only solution. (0)

Anonymous Coward | about 2 years ago | (#41792409)

Any IVY League.

Re:Maybe raising taxes isn't the only solution. (1)

bored_engineer (951004) | about 2 years ago | (#41792275)

TVs? Clearly, I went to school in the wrong decade. I can remember when my Alma Mater [slashdot.org] got telephones. (Truth is, they were late to the game, and only installed telephones in response to an instance of rape, where the attacker broke into the dorm room after protracted effort. Thankfully, he also went to jail.)

Because I was too cheap to buy a TV while at college, I lost the habit of nightly TV viewing. Though I own a secondhand set now, I can't recall the last time I turned it on.

Re:Maybe raising taxes isn't the only solution. (1)

bored_engineer (951004) | about 2 years ago | (#41792303)

What happened to the link? Why didn't it show up when I previewed the comment? That should have been to http://www.uaf.edu/ [uaf.edu] .

Re:Maybe raising taxes isn't the only solution. (1)

Anonymous Coward | about 2 years ago | (#41791995)

The idea that American schools don't have enough money is absurd. America spends more per capita on its schools than any other nation in the world.

Now, that all that money is not correctly distributed among schools is clear too. And far more important than that, all the money in the world doesn't matter if mommy and daddy don't encourage and take part in junior's education. Which in makes marginal investments in failing schools pointless, because it's the entire environment of the district that's failing the students, not just the school.

And it doesn't matter if the per capita spending is great, if the individual spending is too low in some areas, and high in others, or completely unrelated to education spending at all.

That's the real problem, too much is going into things like standardized tests and football stadiums, and even into disability services. Yes, I do support spending on the disabled children, but don't ignore how much it distorts the cost picture.

Re:Maybe raising taxes isn't the only solution. (0, Redundant)

spinninggears (551247) | about 2 years ago | (#41792087)

America is not like the rest of the world. First normalize the populations, then compare the averages.

Re:Maybe raising taxes isn't the only solution. (2)

zill (1690130) | about 2 years ago | (#41792909)

You clearly don't know what "per capita" means.

Re:Maybe raising taxes isn't the only solution. (2)

Onuma (947856) | about 2 years ago | (#41792123)

Mommy and daddy don't have a clear understanding about money or economics any more than congresscritters or teachers do. If they did, they'd teach their children that formal and informal educations combined are the only way they'll really have a successful future beyond a "pawn's mate".

There are multi-level failures within the American education system. It starts with parents ultimately not understanding how to really help their children succeed and it is further exacerbated by poor management of money from local agencies all the way up through the federal Department of Education. There are also societal values at the lower- and middle-classes which can cause education which is received to be ineffective; take for example the middle-class priority of being good at a sport and getting scouted for a team in high school over academic and economic educations, or in poorer neighborhoods the priority on being tough or able to survive on the streets instead of learning something in school which might elevate them out of that cesspool.

If your family can't teach you, your teachers can't teach you, and the gov't can't teach you...then how do you learn? Vicious cycle, if you ask me.

Re:Maybe raising taxes isn't the only solution. (5, Informative)

NotSanguine (1917456) | about 2 years ago | (#41792241)

America spends more per capita on its schools than any other nation in the world.

Actually, we rank fourth [nationmaster.com]

And on a percentage of GDP basis>/a> The US ranks 37th, tied with Estonia. [nationmaster.com]

Re:Maybe raising taxes isn't the only solution. (1)

bored_engineer (951004) | about 2 years ago | (#41792399)

huh! That's even less than your source says we spend on the military, which initially surprised me. But, my first question was: Did they account for spending by the states in their estimate? Further, in trying to sort out the source for the data, the site seemed to repeatedly cite itself in an orobouros-like fashion. Do you have another source?

Re:Maybe raising taxes isn't the only solution. (1)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41792479)

Forth isn't bad. And the GDP one is useless because that's not a correct measure*. How much do we spend as a percent of money we spend on Halloween costumes each year?

* Government also likes to borrow, thinking in terms of percent of GDP. As the economy grows more efficient, they can inhale a big chunk of that efficiency as more borrowing. Yet it seems reasonable to the clueless because the fraction of GDP remains constant.

Re:Maybe raising taxes isn't the only solution. (5, Funny)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41792483)

Actually, Forth kind of sucks. I prefer LISP.

Re:Maybe raising taxes isn't the only solution. (1)

Jeeeb (1141117) | about 2 years ago | (#41792721)

I wouldn't rely on nationmaster.com for reliable, up-to-date information. That data is from 1998 and converted into US dollars based on 2001 PPP measurements. I would not say that is the most reliable source of information on the current state of education spending. According to that Thailand is outspending countries like South Korea, Singapore and Belgium on education..

And? (0)

Anonymous Coward | about 2 years ago | (#41791673)

Cisco is like Oracle. They don't need to discount their prices.

Re:And? (4, Insightful)

sribe (304414) | about 2 years ago | (#41791803)

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.

Re:And? (0)

Anonymous Coward | about 2 years ago | (#41792191)

Then why is facebook trying to hire a shitload of PostgreSql programmers?

Re:And? (1)

Anonymous Coward | about 2 years ago | (#41792253)

Oops, that is Salesforce.com (whatever, they're all basically the same):
http://www.businessinsider.com/salesforce-oracle-postgresql-2012-10

Re:And? (3, Interesting)

Anonymous Coward | about 2 years ago | (#41792277)

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:And? (0)

Anonymous Coward | about 2 years ago | (#41792445)

Wow, someone does understand salesforce. Kudos for laying it out here. People in the know, would rather keep it to themselves than lay it out.

Re:And? (2)

Rytr23 (704409) | about 2 years ago | (#41792619)

99%? Doubtful.. But hefty discounts indeed, and Oracle is still obscenely expensive

Re:And? (1)

nurb432 (527695) | about 2 years ago | (#41792177)

They both do all the time for enterprise customers.

If you are paying 'list', you are either a fool for not asking, or too small for their business in the first place.

Cisco what? (5, Insightful)

EmperorOfCanada (1332175) | about 2 years ago | (#41791683)

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.

Re:Cisco what? (0)

Anonymous Coward | about 2 years ago | (#41791769)

JFYI Facebook relies heavily on Cisco switches.

Google goes their own way indeed.

Re:Cisco what? (5, Insightful)

kqc7011 (525426) | about 2 years ago | (#41791899)

Sometimes a company will place a extremely high bed because they really do not want the contract. But they have to bid to stay on the list for future proposals. And if they do get the bid all they have to do is sub it out to a lower bidder and keep the carry.

Re:Cisco what? (1)

Sepodati (746220) | about 2 years ago | (#41791997)

That's what I was thinking, too.

Re:Cisco what? (1)

bored_engineer (951004) | about 2 years ago | (#41792737)

Is that true for most public entities, and this one in particular? The state of Alaska, on highway projects for example, simply publishes bids for any comer. There is no list of qualified bidders, though for design work, you need an appropriate person with an Alaska PE. Here's [adn.com] an advertisement for airport facilities in Northway, AK, if you're interested. (The preceding link probably broke sometime after 15 November, 2012, if you're reading this later.)

Re:Cisco what? (1)

larien (5608) | about 2 years ago | (#41791909)

Facebook & Google have networks/systems designed to work around failure and data loss is a minor inconvenience. They expect to lose a data centre at various times and continue to Just Work. In those environments, cheap grey boxes are fine provided you design appropriately. If you are designing a critical 24x7 system which cannot spread around in the same way (e.g. financial institutions) may have different requirements.

Now, while I'm not saying that Alcatel is less reliable than Cisco, Cisco generally has the reputation of reliability (warranted or otherwise) and so commands the premium.

Gandalf and life before cisco (0)

sjwest (948274) | about 2 years ago | (#41791911)

There always was some hardware switches and routers made before somebody at corporate decided that cisco was um was not something they would be fired for buying bit like ibm was.

Gandalf whom made hardware bridges got a bit secretive and probably lost support being that even looking at there web pages required that you be a reseller.

  I'm sure those with the clout can buy direct from china to there specs opposed to brand names.

Re:Cisco what? (2)

shentino (1139071) | about 2 years ago | (#41792043)

Kinda like how microsoft woos PHBs into shoving their crap down IT's throat.

Re:Cisco what? (4, Interesting)

bertok (226922) | about 2 years ago | (#41792319)

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:Cisco what? (1)

carleton (97218) | about 2 years ago | (#41792779)

Was that a typo? The 100 Mbit switches when everyone was starting to upgrade to 10 Gbit? I would have expected Google to be using 100 Gb when everyone else was starting to upgrade... if it wasn't a typo, could you explain why?

Re:Cisco what? (0)

Anonymous Coward | about 2 years ago | (#41792819)

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.

the big guys spec out their products and use an oem provider and cut out the "middleman", in this case Cisco. Some of the same stuff from the "white boxish" stuff is made on the same lines as Cisco, et al. This is coming much more popular among the large data center corps.

What was Belkin offering just curious (4, Funny)

Anonymous Coward | about 2 years ago | (#41791689)

I bet Belkin could do the job for a cool 1 million. Of course it wouldn't work, but look at the savings.

Well there you go. (1)

Anonymous Coward | about 2 years ago | (#41791695)

Cisco is using American workers and Lucent must be using Mexicans. HP is using H-1Bs; hence the double the cost of Lucent.

Black people and Chinese are OK too, but as long as there isn't any Irish, I won't have a problem.

Re:Well there you go. (1)

Anonymous Coward | about 2 years ago | (#41791795)

HP is using H-1Bs;

H-1B is a type of pencil, isn't it? Or is H-1B a virus?

Priced to win (0)

Anonymous Coward | about 2 years ago | (#41791699)

Alcatel-Lucent priced to win. They'll make it up on the backend.... though they did leave something on the table.

Cisco's plan... (0)

Anonymous Coward | about 2 years ago | (#41791731)

Subcontract the job out to Alcatel/Lucent for $22M, then blow the remaining $100M on hookers and coke.

Re:Cisco's plan... (2, Funny)

oodaloop (1229816) | about 2 years ago | (#41791741)

I figured the difference was in Monster cables.

Re:Cisco's plan... (4, Funny)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41791903)

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?

Re:Cisco's plan... (0)

Anonymous Coward | about 2 years ago | (#41791983)

Do you know how much packet fidelity you can lose if stray RF gets into your fiber?

No, I don't! Please tell me, this is important. Also, can I subscribe to your newslet*002Arb773,x,.^+NO CARRIER

Re:Cisco's plan... (1)

mrmeval (662166) | about 2 years ago | (#41792931)

Try keeping stray RF/ESD/etc out of TOSLINK transceivers, even Toshiba brand is crap. Yes it's plastic fiber but this crap can't do 1 mbaud. It struggles at 125k baud. So for our unfortunate application we had to redesign the item with shielding. The original receiver/transmitter pair were shielded but they cost reduced them. I can't see how they can transmit audio much less other data.
The other problem with plastic is it will transmit RF/ESD into the transceivers if it's not exactly perfect and moisture free.

We had better luck with glass fiber except when the outer protective sheath was moisture laden plastic.

It's a niche communication product.

 

News: Cisco is overpriced (0)

Anonymous Coward | about 2 years ago | (#41791733)

More News:
The sky is blue
Bears crap in the woods
Those 'local girls' in porn site advertisements aren't real.

Re:News: Cisco is overpriced (4, Funny)

cbhacking (979169) | about 2 years ago | (#41792613)

More News:
The sky is blue

I live in Seattle, you insensitive clod!

The bid is based on what they can afford to pay (2)

PolygamousRanchKid (1290638) | about 2 years ago | (#41791737)

On big projects like these, the contractors try to find out how much the customer has budgeted or is willing to pay. Like, by inviting customers to strip joints, etc.

Once they have an idea of how much money the customer has, they adjust their bid to fit it.

Re:The bid is based on what they can afford to pay (0)

Anonymous Coward | about 2 years ago | (#41791945)

"On big projects", you mean any project that involves bidding. And even with this correction, it would mean that Cisco was not quite told the same thing as the other bidders. So no, something with your statement is wrong. This story is more about Cisco setting a price that basically says take it or leave it, we don't care, either because we're so arrogant that we think you'll pay any price for our stuff, or we actually are doing so well that we can't be bothered with sub-$100m contracts.

Yeah but.... (2)

blind biker (1066130) | about 2 years ago | (#41791763)

...unlike those other companies, Cisco's products are carefully and lovingly fabricated in..... China?

Oops..

Re:Yeah but.... (2)

thegarbz (1787294) | about 2 years ago | (#41792857)

Cisco products? They are just overpriced Huawei rip-offs.

Even with 40% off Cisco... (1)

Anonymous Coward | about 2 years ago | (#41791765)

We saved close to a million dollars by going with HP instead of Cisco for our campus network equipment refresh.

This was even after Cisco discounted 40% off list (We usually got 30% off hardware 40% off contracts, but Cisco sweetened the deal to 40% off hardware too).

Support on the HP gear is way cheaper than a Cisco support contract too (still with 40% off list).

Re:Even with 40% off Cisco... (0)

Anonymous Coward | about 2 years ago | (#41791937)

You can get 70% off (on official list price) on Cisco stuff.
HP will take 60-65% off on access-layer switches. 40-50% on the bigger stuff.

At least, that's what they do for us, but we are a fairly big customer.
Worldwide we buy about 4000 switches a year.
About 1000 cisco (Gb with 10Gb uplinks and cores with 10Gb capability) and 3000 HP (100 Mb switches and 1Gb were we don't need 10Gb uplinks).
HP is just not there yet with the 10Gb stuff.

Re:Even with 40% off Cisco... (0)

Anonymous Coward | about 2 years ago | (#41792755)

Cisco never offered us 70% off. 40% was their best offer, and not good enough. I guess we were too small for that level of discount.

HP was 1/4 to 1/2 the price (the best price Cisco offered us) on comparable switches. We were a bit concerned with HP's lack of direction, as a company, but even bleeding money, HP will be around for the short term.

I wanna see the final cost (4, Insightful)

hawguy (1600213) | about 2 years ago | (#41791799)

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.

Re:I wanna see the final cost (1)

Anonymous Coward | about 2 years ago | (#41792009)

Bingo, we have a winner.

Re:I wanna see the final cost (5, Insightful)

imikem (767509) | about 2 years ago | (#41792377)

This. A disparity this size suggests there is more to the story. Cisco is expensive, yes, but Lucent isn't free. Hard to see how they intend to make money on the project.

What Cisco brings to the table is their support organization. If you spend as much time with networking as I do, responsible for upwards of fifty switches, multiple firewalls, IPS, wireless, etc., you learn to appreciate being able to open a case and get a knowledgeable person on the line inside of 15 minutes, and replacement hardware next day without jumping through hoops.

I've tried HP and Dell network hardware at various times, and came away unimpressed. Servers sure, but they should stick with that IMO. Haven't dealt with any Lucent gear since 2000 (some modem aggregator IIRC), so can't speak to them directly.

Holy cow! (0)

Anonymous Coward | about 2 years ago | (#41791811)

Wow, I wonder if this is a wake up call for Cisco, giving them a clue that there are other network vendors out there. Either that, or Cisco was just sure that the state would pay whatever they asked simply because it was Cisco they were talking about.

HP, Huawei, Alcatel-Lucent and others should take this to heart -- Cisco may finally be losing its premium pricing power. I'm on the systems side of IT, not network, but I know how much Cisco gear costs. $10K for a layer 3 switch, $25K for load balancing appliances, $10+K for firewalls, and on and on. And, Cisco is starting to get into the systems business. I have no experience with their UCS stuff (yet,) and I'll bet the main reason is that my employer can't afford Cisco's prices.

It goes to show Cisco that they can't be comfortable with the idea that they'll always be the incumbent vendor. States are under enormous pressure to reduce spending, so I'm assuming we'll see a lot more of these upsets as smaller vendors are willing to come in and take the business from the 800 pound gorilla of networking. I think that even if the Republicans get their President in place, just the fiscal pressures outside of the rhetoric will force states to start looking hard at this. (And I'm in New York, the other high-tax state with a very nice college and university system -- but there's no doubt that we pay for it.)

Why are the modpoints broken? (0)

JoosepN (1847126) | about 2 years ago | (#41791881)

I don't seem to just have 5, I have at least 20+ so far.

Re:Why are the modpoints broken? (2)

fredprado (2569351) | about 2 years ago | (#41791919)

I don't know if it is a bug or an intended feature but it happens from time to time.

Huawei (4, Funny)

Art Challenor (2621733) | about 2 years ago | (#41791883)

What was the Huawei bid?

Maybe Cisco just didn't want the work. (0)

Anonymous Coward | about 2 years ago | (#41791907)

Maybe Cisco just high-balled the quote because they didn't want the work.

Excel monkey failed at designing requirements (0)

Anonymous Coward | about 2 years ago | (#41791979)

If you have 23 campuses, each with core, access and data center switches and routers in a redundant configuration, then you don't just look at the cost of hardware to pass along packets, you also have to consider how to manage those few hundred network devices. Cisco has pretty decent software to do the job. Whether or not it's worth the extra tens of millions is another question, which is completely missing from the comparison.

Alcatel not worth US$ 22M (0)

Anonymous Coward | about 2 years ago | (#41791985)

Cisco may be too expensive (it is), but the Alcatel are crap. We have some at work, and the NOC people pushing for junking them with extreme prejudice. They're buggy (what was the last time you had to deal with a switch that went weird with vlan 1? Yesterday if you have Alcatel, and never if you use anything else!), they crash, you need a spiritual cleansing ceremony just to be able to face the fear of attempting to upgrade the firmware on those hellboxes, and they are horrible to configure and use even when they're operating properly. May $deity have mercy of your network if you have any L3 box from Alcatel, not even the D-links are that bad. Cisco is in another level altogether, as is Juniper and Brocade. If you run a mid-size network that is non-trivial, you really have no other decent option outside of those three.

It still doesn't explain why Cisco is so damn absurdly expensive. That said, for a bid of that size, you should actually contact Cisco directly, >50% list-price discount are NOT uncommon in those cases. And get it all with a 5-year full maintenance and support already included in the bid, to reduce the TCO: *never* leave that for a future bid!

Here, we're switching to a MPLS-based network(!) so that we can actually have a stable-but-dumb transport network (LDP-based MPLS using L2 pseudo-wires, so it is dirty simple to setup, monitor and maintain), and hook every satellite site directly to a proper PE-IP core (Cisco ASR9K/Juniper MX). It is a great way to get rid of the crap, and gives you an extremely simple, predictable, FULLY-IPv6-ENABLED, coherent and secure network. It is a dream to have a simple star network with 1000 spokes and a single quad-redundant (dual redundancy in two separate buildings) hub at the center of the star). Obviously it doesn't scale in that simple topology to a nation-wide network, but it is good enough for city-wide with ~1k sites and ~500k end-user devices.

Re:Alcatel not worth US$ 22M (1)

cusco (717999) | about 2 years ago | (#41792311)

From the sound of the Alcatel, it makes me wonder if they come out of the same factory as LG switches. Upgraded the firmware on a dozen of them, and the uplink ports on two of them died, never to be revived. Uplink ports on a dozen others have failed or gotten flaky, and some of them drop downstream connections at random times. Sixty six switches, and over a dozen of them have failed fully or partially. Pretty horrible ratio.

Re:Alcatel not worth US$ 22M (1)

quetwo (1203948) | about 2 years ago | (#41792607)

From the look of it, it seems the bid required them to front-load 8 years of maintenance for software and hardware. Cisco usually wins bids by basically giving the hardware away, but charging full for their maintenance (Smartnet). By forcing them to front-load it for such a long time, they had no way to make money on the back-end, which is probably why it was so expensive.

Cisco not worth US$124M, Alcatel not worth US$ 22M (0)

Anonymous Coward | about 2 years ago | (#41792017)

Cisco may be too expensive (it is), but the Alcatel are crap. We have some at work, and the NOC people pushing for junking them with extreme prejudice. They're buggy (what was the last time you had to deal with a switch that went weird with vlan 1? Yesterday if you have Alcatel, and never if you use anything else!), they crash, you need a spiritual cleansing ceremony just to be able to face the fear of attempting to upgrade the firmware on those hellboxes, and they are horrible to configure and use even when they're operating properly. May $deity have mercy of your network if you have any L3 box from Alcatel, not even the D-links are that bad. Cisco is in another level altogether, as is Juniper and Brocade. If you run a mid-size network that is non-trivial, you really have no other decent option outside of those three.

It still doesn't explain why Cisco is so damn absurdly expensive. That said, for a bid of that size, you should actually contact Cisco directly, >50% list-price discount are NOT uncommon in those cases. And get it all with a 5-year full maintenance and support already included in the bid, to reduce the TCO: *never* leave that for a future bid!

Here, we're switching to a MPLS-based network(!) so that we can actually have a stable-but-dumb transport network (LDP-based MPLS using L2 pseudo-wires, so it is dirty simple to setup, monitor and maintain), and hook every satellite site directly to a proper PE-IP core (Cisco ASR9K/Juniper MX). It is a great way to get rid of the crap, and gives you an extremely simple, predictable, FULLY-IPv6-ENABLED, coherent and secure network. It is a dream to have a simple star network with 1000 spokes and a single quad-redundant (dual redundancy in two separate buildings) hub at the center of the star). Obviously it doesn't scale in that simple topology to a nation-wide network, but it is good enough for city-wide with ~1k sites and ~500k end-user devices.

Who wrote the offer? (4, Interesting)

garry_g (106621) | about 2 years ago | (#41792035)

Wondering, was the offer directly from Cisco? Did the person who designed/selected the gear know what they were doing?
Just by selecting the wrong gear, prices between different Cisco gear can already differ by a factor of 2-3 ... 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.
Also, instead of using overpriced (to say the least) Cisco SFP/SFP+ modules would have run the total bill up even more ... (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 ...

And maybe they just didn't want the job... (1)

raist21 (68156) | about 2 years ago | (#41792051)

I know several contractor's who consistently try to bid themselves out of jobs when it comes to dealing with Universities.
Not all of them are technical contractor's admittedly, but I've heard similar stories from various fields.
Most of the time they say that the amount of interference from school official's and various professor's makes the work a nightmare and not worth doing at any price.
I wonder if Cisco figured "the juice isn't worth the squeeze" and intentionally over inflated their price to ridiculousness in order to avoid the entire project.

Re:And maybe they just didn't want the job... (0)

Anonymous Coward | about 2 years ago | (#41792305)

I know several contractor's who consistently try to bid themselves out of jobs when it comes to dealing with Universities. Not all of them are technical contractor's admittedly, but I've heard similar stories from various fields. Most of the time they say that the amount of interference from school official's and various professor's makes the work a nightmare and not worth doing at any price. I wonder if Cisco figured "the juice isn't worth the squeeze" and intentionally over inflated their price to ridiculousness in order to avoid the entire project.

You accidentally spelled some plural nouns correctly.

CISCO (0, Troll)

hackus (159037) | about 2 years ago | (#41792057)

My full take on CISCO came to a realization I think back in 2000-2004 as I watched the company grow sales with the Chinese.

This treasonous company used every trick in the book to sell China the gear required to hunt down and kill anyone on the growing Chinese domestic internet who had anything to say against the Chinese PRC state institutions. I wondered how could a company reason bypassing all of the controls the state department had put on selling high tech items outside the country, in the sorts of shady deals and the sheer effort required to sell to China without getting caught.

In actuality they were getting caught because people like me who knew what CISCO was doing and tracking their little shady deals through the foreign press. Thanks to the many well known political contacts the board of CISCO had with the Clinton administration and then with the Bush administration I doubt they could have got away with most of the multi hundred million dollar deals over the years unless they were cleared by executive order to do so.

I think this might have been a CIA interdiction in China as just recently lots of "anomalous" behaviour in various sorts of gear over the years caused China to switch to a domestic supplier now, Unicom.

Too make a long story short, don't buy CISCO products because if they are not good enough for a bunch of communists who are obsessed with total information awareness, they sure and the hell are not good enough if you have any value of liberty or freedom.

Besides, any network sys admin worth his salt builds his high capacity network with source code. That means firewalls, routers, which means bgp, quagga, openvpn, ssh.

Besides, you can always tell a guy who knows networking when he starts talking about source tree patches to his IPv6 tree vs "Oh, I don't know how IPv6 actually works, I just wait for a firmware BLOB from CISCO."

If you got people like that on your staff, fire them. They are a security risk.

-Hackus

Re:CISCO (-1)

Anonymous Coward | about 2 years ago | (#41792159)

hurr durr i'm so awesome i programmed my own network stack

price spread (1)

bored_engineer (951004) | about 2 years ago | (#41792069)

I'm surprised at the price disparity. It's not like Alcatel-Lucent is a cut-rate supplier.

My employer recently bid construction of a project I designed, and all of the bids were within 50% of the low bidder. When I was working as a consultant, I recall losing to the low bidder by 100s on a project worth $80,000. Do others see a price spread as wide as this one?

Perhaps somebody at Cisco misread a spec?

Re:price spread (1)

gagol (583737) | about 2 years ago | (#41792363)

I managed a website project where off-the-shelf customized would cost us around 10K$ but the boss went with full-custom-tied-to-one-supplier for 60K$... go figure.

Just my opinion (0)

Anonymous Coward | about 2 years ago | (#41792089)

This is only my opinion, but when dealing with Cisco, I always wanted to keep one hand on my wallet and my other checking the specs of what they SAID vs. what that configuration DOES. For instance, we were sold Nexus 7K's, but the license for a feature which was the reason we went for them wasn't in the sale. (I was not involved so I didn't know about it until too late.) Nickel and dime, nickel and dime all the time. And we were over sold. Sorry, we didn't NEED 10 fully blown out 7K's for a network that size. I've seen very large data centers that got by on just two, and that was to have cabinet redundancy.

Now, when it comes to troubleshooting, most of the time TAC was very, very good, and their engineering (vs. sales) people were scary smart and effective. And the fact that if circumstances demand an emergency response, well, all the sudden you've got some very smart people one the phone, flying in, dropping from parachutes - whatever it takes. I do not know the details the OP needs in their config, but 100 million difference in price? That's - ahem - unusual.

Normal business (0)

Anonymous Coward | about 2 years ago | (#41792105)

Something like this happened where I work. HP came in at $10 million on a project and Sun (now Oracle) came in around $35 million. HP got the contract, and the Sun sales manager got a job at HP (hint).

They're gonna regret it! (1)

Tempest451 (791438) | about 2 years ago | (#41792235)

I'll admit, Cisco backbone gear is crap, but their campus-level equipment is pretty reliable. The real value comes in the fact that Cisco is so prevalent and so many people have the certs and the fact that Cisco does have seasoned support system. Lucent has been losing market share for years and it shows, you may get the cheaper gear, but you will get what you pay for.

There is that old saying... (1)

chill (34294) | about 2 years ago | (#41792333)

Cisco, you can get better but you can't pay more.

Re:There is that old saying... (1)

GameboyRMH (1153867) | about 2 years ago | (#41792955)

D'oh, beaten.

Could have been Over-Engineered (0)

Anonymous Coward | about 2 years ago | (#41792423)

I interviewed for a job recently where the buildings each had dual 10-blade or dual 13-blade Cisco switches running on an MPLS core on a dual-path fiber ring for roughly 100 users per building and about 12 buildings. Huge overkill to say the least. If the sales guy thought they could land a ridiculously over-built network sale, this could be a similar case. Why would you land a $1M sale when you could pull a $10M sale just as easily? Add to that the fact that Cisco wants a stupid amount to license certain features and support, and I could see them being that much more. "Apples-to-apples" is not something a suit can determine if he doesn't understand the hardware being quoted.

Cisco doesn't need it (0)

Anonymous Coward | about 2 years ago | (#41792471)

Simply put Cisco does not need this. The other companies desperately try to increase their market share, so they go after this offer. Probably hoping to make up the difference by consulting fees and follow up deals. The problem is, universities tend to buy from the lowest bidder. They are reliable customers as long as you are willing to bid low, which makes them unattractive for the market leader.

I read this (0)

hduff (570443) | about 2 years ago | (#41792475)

as "COSTCO".

In line with expectations, really. (1)

tibit (1762298) | about 2 years ago | (#41792575)

I'm partial to HP gear, and I always claimed that it has quite decent TCO even in very small scale deployments (we have 5k worth of gear, not 40M). People who buy Cisco must be getting a lot of free pussy or something.

To Be Fair (0)

Anonymous Coward | about 2 years ago | (#41792877)

Cisco does make good products but they are not cheap at list prices, but who now days pays list?...the answer is no one.

Some of their kit is very expensive i.e. fibre switches but some of the stuff is prices quite well and functions very well on top of that i.e 800 series routers.

Its a shame their firewall line is 5 years behind the game.

FOr the record, we do sell a lot of Cisco kit at work but we also sell a lot of other vendors.

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