How to Calculate TCO for Cisco Networking Gear
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There is notion out in the marketplace that Cisco networking equipment is significantly more expensive than buying similar gear from other vendors like HP. According to Cisco, that's not the truth.
Cisco is out this week with a new model for enterprises to calculate the Total Cost of Ownership (TCO) of networking equipment. The new model shows that while Cisco might be more expensive from a capital expenditure perspective, the numbers change from a TCO perspective.
Ross Fowler, VP for Cisco Borderless Networks explained to InternetNews.com that Cisco's new TCO model divides total cost of ownership into a modular approach. The TCO model was developed working with a management consulting firm that Fowler declined to identify. The management consulting firm developed the model in part by way of customer interviews to understand real world costs of implementation and ownership.
Doing an examination of TCO over a five year period, Cisco's analysis found that their costs were competitive with those from rival HP.
"Over a five year period we did have a premium over HP, but that came out at 4 percent," Fowler said. "Even though HP are out there in the marketplace saying they are between 30 and 50 percent cheaper than Cisco. "