76% APR investments up for grabs

Did we get your attention with the headline, or did you just assume that this was another get-rich-quick scam? Believe it or not, this is just the tip of the iceberg for the return on investment (ROI) that you can realize for your company if you implement the right solution for your enterprise network.

In the last newsletter, we discussed the importance in today's economy of showing hard, readily demonstrable savings in proposed upgrades to your WAN infrastructure, and we promised an example.

From what the various service providers tell us, a surprisingly low percentage of frame relay customers actually use enhanced channel service unit/data service unit (CSU/DSU) products for network analysis. (For details on this type of product, see the archives of this newsletter, such as " Save more money, thanks to managed CSU/DSUs, " www.nwfusion.com/newsletters/frame/0803fr1.html)

Let's look at an example of what this type of product could do for your network. We'll start by assuming that between two points you have a point-to-point permanent virtual circuit with a committed information rate of 384K bit/sec and a 384K bit/sec port. Why 384K bit/sec? Perhaps this was what you were using with Fractional T-1, and it seems to work, so why change? A reasonable ballpark list price for this configuration is $3,764 per month for an interLATA U.S.-based network.

Assume that you learn by using an enhanced CSU/DSU that you overprovisioned the circuit by only one DS0 (64K bit/sec channel) in the high traffic direction, so that you only really needed 320K bit/sec. Not a big deal, right? And you also found out that your traffic is asymmetrical and you could get equivalent performance with 128K bit/sec in one direction. So you also can drop your port speed ever so slightly to 320K bit/sec. Still not a big deal, right? Wrong!

This new configuration with relatively minor tweaks actually drops the price to $2,859 per month, a savings of $905 per month. Let's assume that the new CSU/DSUs plus a share of the management system costs $6,000. This gives you a payback period to recover the costs of only 6.6 months. And if you look at the savings over a three-year period - a good timeframe for telecom equipment - this has the same effect as taking the $6,000 and investing it at 76% APR.

Steven Taylor, consultant and broadband packet evangelist, and Joanie Wexler, an independent networking technology editor and writer, team up to bring you this analysis and commentary. Taylor specializes in education and market analysis, and Wexler adds incisive reporting and research. For more detailed information on most of the topics discussed in this newsletter, connect to www.webtorials.com, the first Web site dedicated exclusively to market studies and technology tutorials in the Broadband Packet areas of Frame Relay, ATM, and IP.

Feedback and additional topic ideas are welcome. Please contact taylor@webtorials.com or joanie@jwexler.com.

Frame Relay archive
Past newsletters.

Save more money, thanks to managed CSU/DSUs (Part 1)
Network World on Frame Relay, 08/02/98

Managed CSU/DSUs fill you in on local loop performance
Network World on Frame Relay, 08/11/98