How tough are you when it comes to buying for your network?
Not tough enough, says Gartner consultant Mark Fabbi, if the results of a workshop he recently conducted are any indication.
Fabbi, an Uxbridge, Ont.-based vice-president and distinguished analyst who specializes in enterprise communications issues, tested a U.S. audience of CIOs, network managers and corporate acquisition officials on their most recent purchases.
What he found was that “absolutely nobody in the room was getting good discounts.”
All participants scored themselves as not overly influenced by low prices or vendor pressure. But when Fabbi challenged what they paid, the truth came out.
“It was striking the discrepancy between what they thought they were doing and the lack of results,” he said.
“On average the attendees would have saved 35 per cent of their capital costs just by following best [purchasing] practices.”
“I was a little bit surprised,” he added. Everyone over-rates themselves as a buyer, “but I didn’t expect it to be quite that dramatic.”
On the other hand, he admits that from the calls he gets from clients seeking advice every year the number savings missed by most companies “is phenomenal.”
That’s why he believes that despite cutbacks in spending because of the recession enterprises are wasting significant resources on their networks.
Most of it comes down to making bad assumptions about user needs, says Fabbi.
“Enterprises make mistakes when they build network architecture because they assume a technology direction, assume certain products are a solution, assume a vendor or a service provider relationships and they don’t take that step back and say ‘What problems am I really trying to solve?’
So, for example, they get persuaded to extend Gigabit Ethernet to the desktop, which is totally unnecessary for knowledge workers. Or spending on MPLS to connect to a branch office when an Internet circuit and a backup line will do. Or they get taken to the cleaners when buying switches, routers or software.
The result is a network that is overbuilt (“just in case”), underbuilt (because you’re not thinking about new technologies) or you just plain overspend.
Being close to a supplier has some advantages, but Fabbi says it carries great dangers.
“The more loyal you are, the worse deal you get,” he warns. The proof is the workshop test.
Workshop participants agreed one problem is the lack of communication between application developers or purchasers who suddenly dump software on them, impairing their planning. This gets compounded when the network staff don’t get enough time to review applications for security. Another problem was the perception by some staff that they need the highest bandwidth.
Fabbi’s advice to network planners: “Forget about technology for a few days. Think about what end users do for a living. Then start building up a set of requirements based on that. From there you can start think about how to build a network that drives a set of services that’s going to help them. At the same time you’re going to lower your costs.
“Once you understand what your requirements are, you’re back in control.”
