When wireless is the most cost-effective solution
Dec 11, 2000
Veronica Combs
While most managers would like their employees to be connected all the
time, wireless networks are not going to replace wired systems any time
soon. Some industry analysts predict that wireless will be used as needed
by businesses to supplement or enhance existing networks, rather than
replace them outright.
If you are considering installing a wireless network, it may make more
business sense in some cases than others. This article will discuss the
costs of a wireless network and what geographic and business situations
are more appropriate for such a network.
WLAN costs
According to a recent Gartner Group study, the most expensive component
in wireless LANs (WLANs) is the network interface card, which runs about
$169 to $250 per device, compared with an average of $80 for a 10Megabit
to 100Megabit/second wired network interface card. The cost for access
points runs from the $1,000 to $4,000 on average.
Gartner Group forecasts that wireless LAN revenue will total $487.5 million
this year versus $187.9 million two years ago. The total value of installed
wireless LANs will be $35.8 billion in 2004, according to the recent Gartner
reports.
Businesses of all sizes can benefit from a wireless LAN, which now can
provide a powerful combination of wired network throughput, mobile access,
and configuration flexibility. The economic benefits can add up to as
much as $16,000 per user-measured in work productivity, organizational
efficiency, revenue gain, and cost savings-over wired alternatives, according
to 3Com Corp. statistics.
Total cost of ownership considerations
Increased worker productivity and lower installation costs are two of
the potential benefits to a wireless network. Before deciding to install
a WLAN, businesses should look at the total cost of ownership (TCO) to
see if this cost is balanced by the potential benefits.
In the Gartner Research Note, "Why Measure TCO?" analyst M.
O'Connell writes that IT decision-making that incorporates advanced forms
of TCO helps an IS manager to:
* Move beyond costs to include head count, activity-based costing, performance
metrics, and service-level comparisons.
* Understand the TCO concepts that can be applied to the manager's particular
organization.
* Explore various scenarios, taking into account variables such as changes
in organization, training, processes, best practices, products, and architecture
in order to forecast the impact of the contemplated changes to IT infrastructures.
* Quickly quantify and prioritize a wide range of IT planning alternatives.
* Explore various scenarios, taking into account variables such as changes
in organization, training, processes, best practices, products and architecture
in order to forecast the impact of the contemplated changes to IT infrastructures.
* Quickly quantify and prioritize a wide range of IT planning alternatives.
There are several tools available to measure TCO. Managers need to select
a method of estimating TCO based on the decision at hand and the required
depth of information. Gartner recommends a spreadsheet or software-based
products for assessing the basics of TCO and the project's impact on specific
budget areas. For a bigger picture of the total cost of ownership of a
wireless network, managers should use a benchmark-based tool to decide
whether the best IT processes are in place to minimize costs and maximize
performance and to justify and prioritize IT investments.
When wireless makes the most sense
For environments that are difficult to wire, such as a temporary office
space, a historic building, or a library, a wireless network is more cost-effective
in the long run than a wired one.
Wireless is also a good solution if you need to connect several buildings
without installing a wired connection. Wireless LAN bridges can extend
LANs that are typically one to five miles apart. These wireless bridges
span multiple-building LANs without incurring the monthly costs of a T1
or higher speed lines.
For an interesting report on how a wireless network connected legislators
in a building built in the 1800s, read how systems integrators at Pythia
Corp. in Indianapolis installed a wireless network in the Indiana State
Legislature.
On its Web site on mobile computer and wireless networking, MobileInfo.com
lists these examples in which businesses found wireless networks to be
more cost-effective than wired systems:
1. Extending an Ethernet Network
2 - Ontario Blue Cross
Campus-XL3000 Ethernet Repeater System continues to give Ontario Blue
Cross significant cost savings (CDN$1,000/month in fiber rental alone)
and provide the flexible and reliable solution they need.
2. Building-to-Building LAN Connectivity
The total cost of installing a wireless Ethernet system was just under
$30,000. The resulting net payback period was 11.9 months. In less than
a year the customer gained back over $2,200 a month in equivalent phone
line cost savings.
3. Networking Schools for Distance Learning
A school district needed to tie satellite schools with the administrative
center's computer system and reduce or eliminate the need to copy and
distribute instructional videos throughout the district. Due to the cost
and bandwidth constraints of the local telephone company's T1 services,
a more cost-effective, higher-capacity method to link the district's computer
networks was needed.
4. New Media Technology Delivers Last Mile Solutions for University
University finds Campus T1/E1 solution based on wireless LAN bridge can
be amortized in three years (compared to a 10-year payoff period for fiber).
|
