RE: optics pricing (Re: Weird GigE Media Converter Behavior)

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.

Richard A Steenbergen wrote:
Obviously. But us folks who run networks aren't charities either

FTR, I made the exact same point many times myself.

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.

It's not that simple, because of two things: 1. Support and 2. The FUD

<me is the devil's advocate one more time>

1. Support: sometimes you will need vendor support, and this is
especially true of new products. Putting Kingston DRAM in a 2600 is one
thing; a limited test on a few routers will quickly show if it works or
not, and the odds of an IOS upgrade that would suddenly trigger the
third-party memory to cause problems are close to zero, as DRAM as long
passed the development stage and is now a commodity.

OTOH, you won't have that many OC-192 IRs or LRs to play with. Maybe
you'd try one third party PHY, then another one if the first one works,
and so on. And suddenly something changes (which does happen with new
products) and your vendor implements the changes on their PHYs but not
on yours. You're screwed.

2. FUD: How much revenue do these 4 OC-192s bring? This combined with
the multi-million cost of a CRS-1 system, is it worth the risk to save a
mere $200k street price or $400k list? Would you put your job on the
line for it?

</me is the devil's advocate one more time>

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.

Don't get me wrong: I'm equally annoyed, and I think that some pointing
out of the practice and whining about it can be healthy. After all, if
nobody whined about memory prices, we would still be facing the choice
of buying it at 20x cost with support or at 2x without. The point I was
trying to make is that during the initial phase of a product, there is
likely nothing we can do about it no matter how loud we whine (which
should not stop us to whine).

Robert E. Seastrom wrote:
[..CRS-1..] and nobody, not even certain well known crazy people,
is going to pay money for one to use as a SOHO router).

Never say never. 7500s are common soho routers and there are a growing
number of us that are GSR wannabes, because we can't stand to see our
buddies have one. I do not plan to install it in my WC though.


I can see the vendor's concern about support.

But it seems pretty hollow when after they lock me into a
specific SFP, to "help" me, they mark it up 4x or
more--because they can.

If it was really about better customer experience, they
would "lock" it down to an approved list of 3rd-party
products, any of which could be purchased off the open
market. Or they would publish a list of approved and/or
supported 3rd-party optics, like Cisco used to do.

Those customers who wanted to get the endorsed OEM product
could buy those. And customers who wanted to cut corners at
the risk of losing jobs and lower-quality service could do

I've not seen any efforts by vendors to do anything about
3rd-party optics other than to prohibit them. So the vendors
that still support 3rd-party optics must not be experiencing
excruciating pain.

As discussed at a recent NANOG, the vendor-specified
modifications to the optics are trivial and do not justify
the proprietary lock-up or the mark-up (if they did, then
you'd expect the vendors to patent them and not have to lock
them up).

Unfortunately the only way this will change, if it can
change, is with customer pressure, and to a very small
extent, competitive pressure. Hopefully enough large vendors
will allow 3rd-party optics so the threat to buy from the
other guy will be credible.