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Dirty Secrets of Router Interface Pricing

Great stuff today over at the Global Crossing (GLBC) blog, where they spill the beans on their internal investigation into the cost/bit for Ethernet vs. SONET/SDH router interfaces.

The conclusion? The biggest price disparity isn’t necessarily Ethernet vs. SONET interfaces. It’s the difference between big iron routers from vendors like Cisco (CSCO) and scaled up switch routers like the Cisco 7600 or Cat 6k or equivalent products from Force 10.

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In short, 10G OC-192 interfaces are priced at ridiculous levels, particularly considering their cost isn’t substantially different than a well engineered 10GbE interface. The really big shocker is the 5x difference between the carrier class Router and a bootstrapped switch router.

This is not surprising if you’ve had your ear to the ground for a while. It’s best known dirty secret that vendors rape and pillage when it comes to high-end Telecom equipment pricing.

What is surprising is a major carrier like Global Crossing is publicly agitating, in essence putting their vendors and the investment community on notice that something should change.

I will tell you that if these costs don’t fall in line with each other soon, the players offering these big-iron boxes for tall prices are going to find themselves with a dead-end platform.

If they do drop their prices to compete, it may be too late for them to fix the trend.  SONET may have lost favor, and it did nothing to deserve last place in that race…it is the victim of market dynamics. 

Global Crossing may be papering over the technical differences between these systems in some cases. Often it is architecturally impossible for all interfaces on these lower end to operate at maximum speed. This oversubscription of links is a simple way to reduce architecture costs and depending on the application, can be a favorable or unfavorable thing to an end user.

I believe that at these cost differences, they’ll figure out a way to make the cheap boxes work.

BTW, to the folks at Global Crossing, your blog is nice and un-corporate and just plain rocks.

Discussion

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  1. The switch/router verses router issue is being played out currently with the Cisco 6500/7600 platform. People have bought the 6500 “switch/router” to perform carrier routing when they didn’t need the high end interfaces that you’ve mentioned, as the 6500 could run the same software as the 7600, and therefore supported carrier features. Cisco are now starting to introduce 7600 and 6500 specific software. While there is a level of validity in splitting the development focuses of 7600 (carrier) verses 6500 (enterprise) development groups, it does seem to be relatively late in the life of the platform to be doing that. Have a read here for the views of a lot of Cisco customers on this platform split :

    http://thread.gmane.org/gmane.network.nsp.cisco/38857/focus=38875

    Posted by Mark Smith | March 17, 2007, 7:04 AM