The story in the previous post wasn't what I originally wanted to say when I started the post. But you had struck a chord, and the story just came out. Now to what I really started to say.
As the story illustrates, trends are powerful things, especially cost-cutting ones. Once they get going, it seems to feed on itself. One CEO sees a peer cutting costs. Another peer asks what he (or she) is doing on this. You can't say "Nothing", right? The next thing you know, everybody is slashing costs, and the magnitude grows. I call it CEO anorexia - the CEO looks in the mirror and sees his company as too fat. No matter how much pain is incurred by cost-cutting, the CEO still thinks the company is too fat.
What I started to respond to was this:
<<So, since IT budgets are being cut all across America, as I see right now, and as the IT managers get a little more PRICE conscious, our NBase sales will sky rocket! In the past all they cared about was the name behind the equipment.... >>
The name behind the equipment was CSCO or BAY - particularly CSCO.
IT managers in larger shops have been accustomed to long-term relationships with major vendors, like IBM, CSCO, MSFT, etc, and of course the vendors constantly encourage this type of relationship. Build your network using all CSCO equipment (or your mainframe with all IBM equipment) and you avoid compatibility problems (so the theory goes) from "off-brand" vendor equipment, and if you have problems, CSCO (or IBM) will fix them for you (for a hefty price). This is called "support".
This support price is built into the pricing structure. You pay much higher equipment prices, because CSCO (or IBM, et al) has the cost of their service and support infrastructure factored in. Even though another vendor's equipment performs comparably at half the cost, IT managers stick with their traditional vendors - until something major happens (like a cost-cutting initiative) that causes them to look at the price part of the IT equation.
As I said, this is good long-term for MRVC, as they are the "other" vendor, that has comparable (in many cases, better) equipment at significantly lower prices.
<<The LIST price of NBase was 40% of the DISCOUNTED Bay price. That means the LIST of NBase was probably 30% or less of the Bay LIST price. I think the customer in this case was getting a 25% discount on his equipment. But this was a real life comparison.>>
Jack, you must have access to switch prices for CSCO and BAY, (perhaps COMS and INTC too). Could you take the time to post an example of a comparable switch from several vendors, along with the list (and discount if you have it) prices? I think the thread might be interested in this (well, at least me anyway <g>).
<<In almost all of, - but 5 in particular - of our current accounts, the company has announced LAYOFFS, and the IT budgets are under constraint. Even our least price conscious customers are cutting back their network expansion plans.
A typical example is a campus with 4 buildings. Right now, the 3 remotes are wired back to the main building with 100MB fiber. We had in the budget, and planned on upgrading the 100MB fiber to dual GE with redundancy and multi-link trunking. We now have to scale back to a single GE to each site.
That may not look like much on the surface, but it cut the cost of the required equipment by 60%. We sacrifice redundancy and bandwidth. But, in the FIRST COST CUTTING MOVE EVER at this account, we have redesigned the network accordingly.>>
Gee Jack, did you mention Fiber Driver to them? You can use each fiber pair as TWO lines, keeping your redundancy, and with NBASE equipment you could keep the bandwidth AND redundancy and still come in with lower overall cost.
I agree with you that this cost-cutting trend is favorable for MRVC. Their doubled sales staff (with Xyplex being heavy domestically) should be in a good position to take advantage of this trend, as will their new line of Optical InterNetworking products, and the unique capabilities of Fiber Driver. |
