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RFP: Gigabit Ethernet Networks
May 3, 1999

Addressing TCO
For the chart onTotal Cost of Ownership in PDF format.

Total cost of ownership goes well beyond simple equipment costs. Expenses for staffing and running the network and training for its installation, support and management add up fast. Likewise, support contracts for product replacement, technical troubleshooting and software updates often outweigh the cost of the solution over the lifetime of a product.

In this RFP, we scratch the surface of the TCO issue in the chart below. We requested a summary of the cost for 24x7 technical support, software upgrades and four-hour hardware replacement costs from each participating vendor. MediaMagik's business-critical network backbone justifies the cost of quick hardware replacement and 24-hour support.

In the chart below, we compute the cost of the network over a three-year period by adding three years of service and support to the solution cost, and dividing by the number of end-user and server ports in the vendor's configuration.

These computations are just one small aspect of the TCO in a network of MediaMagik's size. The network design's complexity, number and type of switches, and platform reliability all contribute to the bottom line. The vendor you choose will determine some of these costs, while others (such as technical training) are common regardless of the supplier. Some vendors offer on-site training in large deals, while others offer free local training at a training center. These benefits sweeten the deal in a large bid, but their associated costs and benefits can be difficult to quantify.