optics pricing (Re: Weird GigE Media Converter Behavior)

Sat Aug 28 21:18:58 UTC 2004

On Sat, 28 Aug 2004, Michel Py wrote:

> Grow up; when you buy a Saab "brand" part or option for a Saab car, it
> costs twice as much as the same aftermarket part, which still is twice
> as much as what you could get if you bought a box of 10 directly from
> the manufacturer, which is twice as much as it costs them to manufacture
> overseas. Everyone does that.

If the listprice was 4 times the manufacturer cost you still wouldn't see 
an argument from me. I'll gladly pay 2-3 times the cost to get a fully 
supported and approved product from the manufacturer.

It's the 10x-50x markup I find repulsive, and compared to other 
manufacturers equipment (were I actually have a choice of buying from 
other manufacturers and testing it myself) the Cisco business case gets
really bad.

Also, the "time to market" is a big factor, the fact that Finisar was late
in developing 80km SFPs compared to other manufacturers made for instance
Extreme Networks (don't know about Cisco) very late in releasing this
product. At that time, Extreme also coded their optics so there was no
choice. This made us not purchase their SFP based offerings at all for
quite some time. I'm still very hesitant when it comes to Cisco SFP based 
products for the same reason. I now see the same thing with Xenpak WAN 
PHY.

When you have an industry standard for interchangable optics, why should a 
manufacutrer lock in their customers to their own branded optics? (Yeah, 
I've heard the sales excuse before).

-- 
Mikael Abrahamsson    email: swmike at swm.pp.se