Take Gartner’s advice on Third Party Transceivers
Industry research giant Gartner does not mince its words on third party transceivers. In a report called “How to Avoid the Biggest Rip-Off in Networking”, it savages the overheads that big name brands charge and calls them out on the scare tactics used against third party suppliers. The message is that paying less for the what is effectively the same product is the smart move for data centre networking and wired campus switching.
What’s it worth?
According to Gartner research, network transceivers make up 10% to 15% of enterprises’ network capital spending. So the cost saving opportunities of making the smart choice here are significant. With brands like Ortial Technologies offering up to 40% price reduction on the Original Equipment Manufacturer (OEM) alternative, this results in around a 5% saving to the overall network outlay. Since this is significant, one has to ask why more companies are not taking advantage of this. According to Gartner, the answer lies in the fear, uncertainty and doubt cast on the reliability and compatibility of third-party alternatives.
What’s the downside?
The Gartner report states that some aggressive OEMs and their sales channels use strong language to dissuade customers from using non-branded alternatives. Phrases used include “void the warranty” and “illegal” when referring to third party goods. The Gartner response to this is a strongly worded “simply not true”.
This supports the feedback we have had from our own customers, who have installed our SFPs into branded systems with absolutely no conflict. In fact, in many cases, the branded system simply does not register that the third party component is there.
How is this possible?
Transceiver technology is well established. The basic components used in most networks are commodity 1G and 10G products. In fact, the Gartner report highlights the fact that most transceivers OEMs use are equipment from third party manufacturers with a brand sticker added at the end. Transceivers with a third party label are essentially identical but with a lower price on the sticker.
Other benefits of third party
Gartner reports that negotiating blanket discounts for the entire networking bundle results in lower cost savings overall. Customers may think they are getting a good deal if the top line discount is 30%. However, hidden within in this is a large mark-up on transceivers, which are the most cost-effective component to make. There are further savings to be had by purchasing these components separately with a company that is happy to quote on individual parts. Since Ortial specialises in specific components, we are in an excellent position to help our customers do this and add on the further discount of manufacturing our components at a lower cost level. Flexible, adaptable and honest, our transceiver deals help customers make the very most of their networking budgets.
Read how using Ortial Technologies SFP transceiver modules has helped businesses such as the University of Cambridge Network Services Department make significant savings on their IT network infrastructure.