Alcatel-Lucent far underbids Cisco for California State Univ network refresh

Network World - It really was apples-to-apples.

The $100 million price differential between the Alcatel-Lucent and Cisco proposals to refresh California State University's 23-campus network that we wrote about earlier this week was based on an identical number of switches and routers in various configurations.

CSU allowed Network World to review spreadsheets calculating the eight-year total cost of ownership of each of the five bidders for the project.

The price discrepancy between Cisco and Alcatel-Lucent sparked off a flurry of skepticism in comments on the Network World site that the bids did not represent a fair, apples-to-apples comparison. When asked if the number of network elements Cisco proposed drastically outnumbered those of the other bidders, Michel Davidoff, director of cyberinfrastructure at CSU, replied "Absolutely not."

"Everybody had to comply with this spreadsheet," he said. "Every campus had two border routers, two cores, and two server farm switches. All the vendors had to propose exactly the same solution" based on the average number of servers deployed at each CSU campus. "All of this is based on exactly the same data to all of the vendors. It's exactly the same formula for all of the vendors."

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Alcatel-Lucent won the project with a bid of $22 million. Cisco was the high bidder with a cost just under $123 million. Not only was Cisco's bid more than five-and-a-half times that of Alcatel-Lucent's, it was three times that of the next highest bidder: HP, at $41 million.

Juniper came in at $31.6 million, and Brocade offered $24 million. All of the prices included discounts offered to CSU, and the price delta between Cisco and the other bidders actually widened after the discounts were applied, Davidoff said.

The costs were broken down into switches and routers for access, server farm, core and border routing requirements. They included port densities from 8 to 480 ports of Gigabit Ethernet and 10G Ethernet, with copper and fiber connectors, Layer 2 and 3 feature sets, PoE and non-PoE, etc.

Cisco pitched the Catalyst 3750-X for access, Nexus 7000 for server farms, Catalyst 6509 for the core and the ASR 1006 for border routing. Alcatel-Lucent proposed the OmniSwitch 6850 for access, and 9700 for server farms, core and border routing. Post-RFP, however, CSU decided to deploy the OmniSwitch 6450 and 6850 for access, 6850 and OmniSwitch 6900 for server farms, and 6900 for core and border routing -- all of which lowered the cost of the project.

Total bid costs were the sum of Layer 2 hardware (and software), Layer 3 hardware (and software), Layer 2 maintenance, Layer 3 maintenance, training, and taxes and shipping. Cisco's cost in each respective category was $51 million; $18.7 million; $34.3 million; $10.6 million; $1 million; and $7 million.