RE: optics pricing (Re: Weird GigE Media Converter Behavior)
Mikael Abrahamsson wrote: If the VSR card was $899k, the SR card was $999k and the LR card was $1099 you wouldn't hear any complaints from me.
That's even worse than the current prices! Given that the VSR is currently 330k, the SR could be 450k and the IR 500k.
It's the fact that Cisco is reselling optics (which is not their core business as far as I see it) at a huge markup that is bothering me.
Grow up; when you buy a Saab "brand" part or option for a Saab car, it costs twice as much as the same aftermarket part, which still is twice as much as what you could get if you bought a box of 10 directly from the manufacturer, which is twice as much as it costs them to manufacture overseas. Everyone does that. Besides, there's nothing new about Cisco doing it, they've always have. DRAM and Flash is not their core business either, and they have sold both for 20 times the street price just because they built a proprietary connector. Then some smart @55 at Kingston and Viking figured out if Micron could manufacture the Cisco part so could they and that there was tons of money to make and they begun to sell memory for "only" twice as much as it could be, which in turn caused Cisco memory to drop to "only" 4 times the price of regular. Economics 101. Cisco (and many other vendors, BTW) are not charities. Their purpose is to make investors and shareholders (which includes me) happy. And yes, this includes reselling OEM hardware at astronomical prices when they can, because it never lasts long. Michel.
Grow up; when you buy a Saab "brand" part or option for a Saab car, it costs twice as much as the same aftermarket part, which still is twice as much as what you could get if you bought a box of 10 directly from the manufacturer, which is twice as much as it costs them to manufacture overseas. Everyone does that.
All of us have been on the underside of Cisco and other vendors' capitalistic boot from time to time. Just because it chaffs every so often is not an indictment of capitalism.
Economics 101. Cisco (and many other vendors, BTW) are not charities. Their purpose is to make investors and shareholders (which includes me) happy. And yes, this includes reselling OEM hardware at astronomical prices when they can, because it never lasts long.
One could argue that this public & private chaffing is what precipitates the competition that alleviates the condition. If another vendor doesn't realize there is demand... DJ
Deepak Jain wrote:
One could argue that this public & private chaffing is what precipitates the competition that alleviates the condition. If another vendor doesn't realize there is demand...
Competition & capitalism are great in my book. My personal worry about this kind of overpricing is when it is combined with legal muscle power (via patents et al.) to prevent _fair_ competition. Cisco do not appear to be trying that in the hardware area, or at least that's how it looks from the outside - as someone who has never ever bought a single cisco product in over 10 years of being here. On the other hand, the use of patent licenses (like those that say "free if you don't claim against us") for things like VRRP do worry me. rgds, -- Peter
Peter Galbavy wrote:
On the other hand, the use of patent licenses (like those that say "free if you don't claim against us") for things like VRRP do worry me.
Everybody's entitled to their opinion, but this excerpt from http://www.ietf.org/ietf/IPR//VRRP-CISCO does not seem to me to portend predatory pricing: /qw Cisco believes that implementation of draft-ietf-vrrp-spec-05.txt will require a license to Cisco's patent #5,473,599. If this protocol is approved as an IETF standard, licenses will be available to any party on reasonable, nondiscriminatory terms for implentation of the protocol. On March 20, 1998, the definitive statement from Cisco Systems was received: From: Martin McNealis <mmcnealis@cisco.com> The following statement is in response to recent requests for a clarification on Cisco Systems' position regarding both its Hot Standby Router Protocol (HSRP) and the Virtual Router Redundancy Protocol (VRRP) proposal:- In Cisco's assessment, the VRRP proposal does not represent any significantly different functionality from that available with HSRP and also implementation of 'draft-ietf-vrrp-spec-06.txt' would likely infringe on Cisco's patent #5,473,599. When Cisco originally learned of the VRRP proposal, the Hot Standby Router Protocol was then promptly offered for standardization with the understanding that, if approved, licenses for HSRP would be made available on reasonable, nondiscriminatory terms for implementation of the protocol. This offer stands for the adoption and implementation of HSRP. However, now that the 'draft-li-hsrp-01.txt' submission is approaching expiration and the Working Group is continuing with the VRRP proposal, Cisco Systems reserves the right to protect its intellectual property. Furthermore, Cisco takes the position that standardizing on another proposal that so closely mirrors an existing, well established, extensively deployed protocol is out of step with the principles and practices embodied in the IETF and would thus represent cause for concern within the industry. /qw
On Mon, 30 Aug 2004, Mark Borchers wrote:
Peter Galbavy wrote:
On the other hand, the use of patent licenses (like those that say "free if you don't claim against us") for things like VRRP do worry me.
Everybody's entitled to their opinion, but this excerpt from http://www.ietf.org/ietf/IPR//VRRP-CISCO does not seem to me to portend predatory pricing:
However it does make an open source (and certainly a free) implimentation very difficult to do. A license of $1000 per machine is "reasonable and nondiscriminatory terms" for $100k routers but not for a something that I want to download and run on a few Linux boxes. -- Simon J. Lyall | Very Busy | Web: http://www.darkmere.gen.nz/ "To stay awake all night adds a day to your life" - Stilgar | eMT.
On Tue, Aug 31, 2004 at 07:17:22AM +1200, Simon Lyall wrote:
On Mon, 30 Aug 2004, Mark Borchers wrote:
Peter Galbavy wrote:
On the other hand, the use of patent licenses (like those that say "free if you don't claim against us") for things like VRRP do worry me.
Everybody's entitled to their opinion, but this excerpt from http://www.ietf.org/ietf/IPR//VRRP-CISCO does not seem to me to portend predatory pricing:
However it does make an open source (and certainly a free) implimentation very difficult to do.
A license of $1000 per machine is "reasonable and nondiscriminatory terms" for $100k routers but not for a something that I want to download and run on a few Linux boxes.
In that case the $1000/machine licence discriminates against OSS implementations, and isn't "reasonable and nondiscriminatory". <grin> - Matt
On Tue, 31 Aug 2004, Simon Lyall wrote:
On Mon, 30 Aug 2004, Mark Borchers wrote:
Everybody's entitled to their opinion, but this excerpt from http://www.ietf.org/ietf/IPR//VRRP-CISCO does not seem to me to portend predatory pricing:
However it does make an open source (and certainly a free) implimentation very difficult to do.
Then there's always the option to implement something else. Hm, where can I order a CARP license again...? http://www.openbsd.org/lyrics.html#35 /leg
Lars Erik Gullerud wrote:
Then there's always the option to implement something else. Hm, where can I order a CARP license again...?
... which is why I think I used VRRP as an example - "ignore and replace" as opposed to "embrace and extend". In answer to Mark Borchers' point about the IETF draft mentioning "reasonable and non-discriminatory", I have the reply from Cisco's dude (whose name I forget, but I think he reads NANOG) that offers "me" the license, on non-discrimintory terms, part of which is to never claim against Cisco for any patent I may hold. That's not reasonable to me. But hey. I only used VRRP as an example and by no means as the single only one. I like W3C's way of doing things, and not the IETF's for the moment - but I suppose the subject line should change to reflect a different area of discussion... still about the network operators costs though. Peter
On Sat, 28 Aug 2004, Michel Py wrote:
Grow up; when you buy a Saab "brand" part or option for a Saab car, it costs twice as much as the same aftermarket part, which still is twice as much as what you could get if you bought a box of 10 directly from the manufacturer, which is twice as much as it costs them to manufacture overseas. Everyone does that.
If the listprice was 4 times the manufacturer cost you still wouldn't see an argument from me. I'll gladly pay 2-3 times the cost to get a fully supported and approved product from the manufacturer. It's the 10x-50x markup I find repulsive, and compared to other manufacturers equipment (were I actually have a choice of buying from other manufacturers and testing it myself) the Cisco business case gets really bad. Also, the "time to market" is a big factor, the fact that Finisar was late in developing 80km SFPs compared to other manufacturers made for instance Extreme Networks (don't know about Cisco) very late in releasing this product. At that time, Extreme also coded their optics so there was no choice. This made us not purchase their SFP based offerings at all for quite some time. I'm still very hesitant when it comes to Cisco SFP based products for the same reason. I now see the same thing with Xenpak WAN PHY. When you have an industry standard for interchangable optics, why should a manufacutrer lock in their customers to their own branded optics? (Yeah, I've heard the sales excuse before). -- Mikael Abrahamsson email: swmike@swm.pp.se
On Sat, Aug 28, 2004 at 10:28:24AM -0700, Michel Py wrote:
Economics 101. Cisco (and many other vendors, BTW) are not charities. Their purpose is to make investors and shareholders (which includes me) happy. And yes, this includes reselling OEM hardware at astronomical prices when they can, because it never lasts long.
Obviously. But us folks who run networks aren't charities either (though given most folks' current economic status, they might as well just become 501(c)(3)'s and call it a day). A few of us actually have business plans that involve something other than scheduling our next chapter 11 filing, which every so often requires the use of that squishy thing between your ears. Smart folks understand that router vendors are reselling optics for 10x-100x the price they can actually be purchased for. Obviously it is the job of the vendor to try and squeeze as much money out of their customers as they possibly can, but at least smart folks have the CHOICE not to take the bait. We start to get annoyed when the vendors remove that choice by engaging in practices like locking down GBIC/SFP modules by vendor ID codes for no reason other than to force customers into paying absurd markup for their optics, intentionally designing interfaces with fixed optics so that you have to purchase more cards than you might actually need in order to have the necessary optics, etc. -- Richard A Steenbergen <ras@e-gerbil.net> http://www.e-gerbil.net/ras GPG Key ID: 0xF8B12CBC (7535 7F59 8204 ED1F CC1C 53AF 4C41 5ECA F8B1 2CBC)
participants (9)
-
Deepak Jain -
Lars Erik Gullerud -
Mark Borchers -
Matthew Palmer -
Michel Py -
Mikael Abrahamsson -
Peter Galbavy -
Richard A Steenbergen -
Simon Lyall