Thursday, 24 July 2008

Don’t Believe Everything You Read about Wi-Fi Equipment TCO, Warns ABI

Wi-Fi equipment vendors are now frequently turning to Total Cost of Ownership (TCO) studies as a way to convince customers about the value of their offerings. However, operational considerations and expenses must be factored in alongside the initial price of a system to find its true cost says ABI Research.

“You can’t believe everything you read,” says Stan Schatt, ABI Research vice president.

“In their effort to build a convincing TCO argument, many vendors ‘cross the line’ in the editorial guidance of those preparing the study. They exaggerate, they make unrealistic assumptions, they tailor proposed usage scenarios to show off their systems’ best qualities. This is counterproductive: such TCO studies lose their credibility, and smart financial decision-makers dismiss them.”

TCO studies, usually carried out by research analysts, are generally designed to help a network manager or CIO make a case to a CFO or other budget director in favor of a particular vendor’s equipment.

First-tier analyst firms will not lie, says Schatt. They will not prostitute themselves in a TCO study. But they will evaluate potential buyers based on criteria provided by the commissioning vendors.

“The bottom line is that a well thought-out TCO study that compares Wi-Fi equipment can be an effective sales tool, assuming that a product does have some real advantages. The most creative TCO study will not be able to compensate for a product that trails in terms of features and performance,” concludes Schatt.