Synergy Research Group Case Study

To stay competitive in a fluid business environment, service providers must be able to adapt quickly and make sound infrastructure and financial decisions that relate to their networks. This adaptation capability, which has significant implications for a business’ bottom line, is mandatory for a company to keep an advantageous edge in an aggressive and dynamic market. Deploying cost-effective networks are at the forefront of creating a competitive advantage. Having the most functional hardware – hardware that provides CapEx and OpEx benefits – is one important component in containing network infrastructure expenditures.

Additionally, consumers are demanding that businesses address the environmental aspects and impacts of their products and services. To meet these requirements – cost containment and environmental consciousness – providers need a solution that increases their business value and yet addresses the ecological consequences that these devices have on such issues as global warming, carbon dioxide emissions, space utilization, and energy costs.

Too often, businesses perceive energy efficiency and sustainability investments as costly add-ons that have minimal benefits. These goals of cost containment and environmental friendliness need not be mutually exclusive. Cisco offers devices that can combine distinct functions while having a positive impact on the environment and on service providers’ bottom line.

Synergy Research Group conducted a case study comparing the environ­mental data and cost of ownership investment between the new Cisco ASR 1000 Series router versus competitive solution combinations with the same range of capabilities. Our goal was to determine the advantages of implementing the Cisco ASR 1000 Series, which takes network productivity to a higher level and provides power efficiency while meeting the definition of “green.”

The Cisco ASR 1000 Series can meet a variety of provider needs including:

• Enhanced Multiservice Edge Networking Capabilities:
  WAN Aggregation; WAN + IPSec; WAN + IPSec + Security; WAN + IPSec + Security + Voice/Video
• Reduced CapEx and OpEx Burden
• Better Rack-Space Utilization
• Lower Data Center Space Costs
• Improved Power Efficiency

We compared the new Cisco solution with two different competitors’ line card-based and appliance-based solu­tions to calculate the TCO and environmental significance that each has. In doing so, we made the following environ­mental impact assumptions:

• Calculations based on the maximum DC power
• Cooling power required, which equaled 100 percent of equipment power
• Carbon dioxide emissions equaling 0.672kg / kWh of electricity delivered

In our analysis, using the WAN + IPSec + Security + Voice/Video service model, the Cisco ASR Series performed significantly better than the other devices because of several reasons. They include:

• Power usage is consistently less than competitive platforms
• CO2 emissions are significantly lower than competitive platforms

More importantly, the Cisco ASR 1000 Series is a one-box, integrated solution; whereas, comparable competitive solution, at minimum require a separate SBC appliance. Although one competitor’s PIC-based solution has a PIC-based firewall, it needs an appliance to perform SBC functions. An appliance-based competitor’s solution has both the firewall and an SBC but as two separate appliances.

When determining equipment needs, decision makers consider the increase in the value of their business, optimi­zation of their return on investment (ROI), total cost of ownership (TCO) and productivity improvement when looking at network equipment choices. Cisco’s ASR Series meets these needs better than the competitors that offer similar solutions. Our TCO assumptions were based on the following:

• Installation: 5% of CapEx
• Maintenance: 10% of CapEx
• Depreciation Period: 5 Years
• Power Consumption Savings: Difference in annual kWh usage x 8 cents per kWh
• Data Center Costs per Square Foot based on Rack Units per Solution

The following table illustrates the initial investment expenses and the annual operating expenses of the competitors’ solutions. One-time, initial set-up expenses for all of the competitors’ products exceed those of every Cisco ASR Series routers. Annual operating expenses for the competitors’ solutions also surpass those of the Cisco ASR Series.

Table 1.One-Time Expense and OpEx Advantage Summary

1. One-time expense includes list price + data center space costs
2. OpEx includes annual maintenance + annual power usage

Simply put, the integrated approach of the Cisco ASR Series routers helps decrease total cost while addressing environmental impact concerns. Not only offering a distinct capital expenditure advantage, owning a Cisco ASR Series router over a five-year period, in comparison to the competitors’ appliances, constitutes a OpEx saving ranging from 1.6 to 4.7 times per year. Additionally, the one-time savings vary from $143.9K to $971.6K, depending on the Cisco ASR Series model. The new Cisco solution, which ranges from 2-6RUs, occupies from 4-18 fewer rack unit space than the competitors’ comparison; and has front to back cooling, which results in more efficient rack space utilization and fewer data center space costs. Annual maintenance and power savings extend between $16.9K and $97.7K, making the Cisco ASR 1000 Series Router much more energy and environmentally efficient (comparatively).

Owning a Cisco ASR 1000 Series router clearly provides a lower TCO and generates an extremely compelling return on investment (ROI) for the network as well as contributing positively to the environment. To what do these “green” costs translate? Table 2 outlines how environmentally friendly the series is for each one unit deployed:

Table 2.Environmental Savings

* Depending on Cisco ASR 1000 Series Model and Competitor Solution

In addition to committing to significant capital outlays for new networking equipment, companies must also assess the environmental impact along with the cost of new solutions. This means taking a hard look at all of the environmental costs associated with the network, including physical space, power usage, operation of and maintenance of the network, separate from the accountability for the strategic needs of the company from the corporate perspective. When making this determination, it is important that a company not be blinded by just the price per performance issue.

With quality and efficient appliances, enterprises are finding that they can satisfy the demand for new technologies and, yet, address the global issues of power consumption and environmentalism.

SUMMARY

A “green” approach to architecting a network can minimize costs while simultaneously providing efficient network solutions. The cost savings of using energy and space-efficient routers can be gainfully deployed toward expand­ing business operations and utilizing dedicated resources to focus on revenue and profit-generating efforts. An environmentally sound solution for a provider can support the rapid pace of growth and innovation required to remain competitive in today's business environment. Not only does an eco friendly solution contribute positively to the environment, it also enhances and possibly elevates the provider’s market reputation, that is, as being a responsibly “green” company.

Click here for Synergy’s methodology and details on this case study.

Synergy Research Group - Consulting Division
http://www.srgresearch.com