Cisco Network Did Cost $100 Million More
It really was apples-to-apples.
The $100 million price differential between the Alcatel-Lucent and Cisco proposals to refresh California State University's 23-campus network that we wrote about 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.
The price discrepancy between Cisco and Alcatel-Lucent sparked off a flurry of skepticism in comments on the Network World site that the bids did not represent a fair, apples-to-apples comparison. When asked if the number of network elements Cisco proposed drastically outnumbered those of the other bidders, Michel Davidoff, director of cyberinfrastructure at CSU, replied "Absolutely not."
"Everybody had to comply with this spreadsheet," he said. "Every campus had two border routers, two cores, and two server farm switches. All the vendors had to propose exactly the same solution" based on the average number of servers deployed at each CSU campus. "All of this is based on exactly the same data to all of the vendors. It's exactly the same formula for all of the vendors."
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.
Juniper came in at $31.6 million, and Brocade offered $24 million. All of the prices included discounts offered to CSU, and the price delta between Cisco and the other bidders actually widened after the discounts were applied, Davidoff said.
The costs were broken down into switches and routers for access, server farm, core and border routing requirements. They included port densities from 8 to 480 ports of Gigabit Ethernet and 10G Ethernet, with copper and fiber connectors, Layer 2 and 3 feature sets, PoE and non-PoE, etc.
Cisco pitched the Catalyst 3750-X for access, Nexus 7000 for server farms, Catalyst 6509 for the core and the ASR 1006 for border routing. Alcatel-Lucent proposed the OmniSwitch 6850 for access, and 9700 for server farms, core and border routing. Post-RFP, however, CSU decided to deploy the OmniSwitch 6450 and 6850 for access, 6850 and OmniSwitch 6900 for server farms, and 6900 for core and border routing -- all of which lowered the cost of the project.
Total bid costs were the sum of Layer 2 hardware (and software), Layer 3 hardware (and software), Layer 2 maintenance, Layer 3 maintenance, training, and taxes and shipping. Cisco's cost in each respective category was $51 million; $18.7 million; $34.3 million; $10.6 million; $1 million; and $7 million.
Alcatel-Lucent's was $14.5 million; $2.5 million; $1.8 million; $798,000; $777,000; and $1.7 million.
SAN JOSE TWIST
Alcatel-Lucent will be deployed at 22 of the 23 CSU campuses; San Jose State University is going its own route with a broader Cisco implementation costing $28 million over five years.
SJSU is replacing three legacy phone systems with a Cisco VoIP implementation supporting integrated voice/data and video. The university is also implementing WebEx conferencing in each classroom, Wi-Fi access across the campus, high-definition TelePresence conferencing in 51 "learning spaces," and a new switch and router infrastructure to support it all.
"We're using technology to provide a better learning environment," says SJSU President Mohammad Qayoumi. "We want to make sure students will be successful. Our view was not what hardware or software we were looking at; our view was a comprehensive solution with a strong emphasis on learning and the delivery of learning content and the students' success."
Cisco is SJSU's incumbent vendor, just as it is with the entire CSU system. Asked if SJSU put the project out for bid, Qayoumi said the university "looked at the industry at what was available.
"No other vendor could meet the needs," he said. "They may have better cost or performance but the more important element in a university is how all of these technologies connect together and work as an integrated solution."
SJSU worked with Cisco over a six- to nine-month period designing a system, Qayoumi said. He said he didn't know if SJSU took part in the RFP evaluation that culminated in Alcatel-Lucent winning the $22 million systemwide contract.
"I don't know, but I don't believe we participated in the CSU systemwide evaluation," he said. "I don't know what kind of committee system the chancellor's office had set up for evaluating Alcatel.
"If you look at the overall solution ... you might make savings in one particular aspect, whether it's hardware, software or servers," he said. "But our view was, how does it really meet the needs of all of our students and the needs of our faculty and staff. That was the most critical element for us."
Davidoff declined to comment on SJSU's decision to go in another direction for its network infrastructure. The first year of the SJSU project will be funded by the sale of SJSU's Educational Broadband Service spectrum, and additional funds will come from the university's IT services office budget, a new student fee, and monies from the continuing education program.
Jim Duffy has been covering technology for over 25 years, 21 at Network World. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy.
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