16 Mar 2018

Infographic: Reducing total cost of ownership

This post is courtesy of Cisco Meraki www.meraki.cisco.com

Saving through commercial flexibility

Total cost of ownership (TCO) isn’t a complicated concept. Simply put, it’s the sum of the upfront cost of a product or service and the direct and indirect costs incurred during its lifetime. 

It’s likely to be how most of us consider a large purchase in our personal lives. Let’s say you’re in the market for a new car. You’ve narrowed your selection down to a few potential vehicles that meet your needs. Naturally, within the potential cars there will be a range of prices. To make a final decision, the discerning buyer might go on to compare running costs for the vehicles: how much are they likely to depreciate, how much do they cost to insure, service, refuel, etc. Intuitively, total cost of ownership has been considered.

Nevertheless, many buyers considering an IT infrastructure upgrade can fall into a pattern of using upfront cost as their key criteria. Not only does this inadvertently neglect potential products or solutions that may be much better suited, but in the long run may actually end up costing a lot more.

When purchasing Meraki as a managed product through a service provider, buyers have the option of owning the devices outright with an upfront investment or purchasing them as a service, making it an OPEX spend. This commercial flexibility means that buyers are no longer restricted in their choices by financial constraints. 

For many companies, a monthly payment option is not just attractive for cash flow purchases. Many more savings can be made through resources, time and effort, when considering managed cloud based networking.  

At this point, we’re often asked by customers and partners alike for stats or numbers to quantify how much Meraki customers are saving in operational costs. Managed cloud-based networking allows a number of savings on resources: 

  • Faster deployment of sites: up to 6 sites can be deployed by cloud at the rate of 1 traditional deployment. This means businesses save on project and set up costs each time they deploy to a new site. 
  • Enterprise-grade devices: when it comes to your network, downtime simply isn’t an option. By investing in market-leading, enterprise-grade devices from Meraki, you can enjoy greater levels of security and reliability.
  • Continual updates: firmware updates are released periodically to licensed organisations in a way that’s minimally disruptive to end users, ensuring your environment is current and compliant.
  • Cloud-based management: your overall network is managed via a centralised, cloud-based console, so regardless of how many devices you have in place, or across any number of locations, you have full visibility and control.

We set about acquiring this information and interviewed existing Meraki customers across various verticals to quantify how much time and money they’re saving compared to more traditional technologies. The results are now in:

Highlights from the ‘Reducing Cost of Ownership’ infographic include:

  • Gartner estimates that 80% of total IT costs occur after the initial purchase (OpEx)
  • Meraki customers stand to save in the region of 90% on OpEx
  • Savings in shopping around for the cheapest hardware are likely to pale in comparison to the potential savings in OpEx with Meraki
  • A Wireless (Verizon authorized reseller) can bring 6 stores live with Meraki technology for the cost of bringing one store live with traditional technology
  • Bar S Foods saved over $5m in production revenue with Meraki over 5 years
  • CNOS chose to deploy Meraki even though hardware costs were 15% more than traditional technology. CNOS was able to recover the difference in CapEx within 16 months over a 5-year comparison.