RINA - scott whaps at the nanog hornets nest :-)

Mon Nov 8 08:44:01 UTC 2010

On Sun, 7 Nov 2010 01:07:17 -0700
"George Bonser" <gbonser at seven.com> wrote:

> > >
> > > Yes, I really don't understand that either.  You would think that
> the
> > > investment in developing and deploying all that SONET infrastructure
> > > has been paid back by now and they can lower the prices
> dramatically.
> > > One would think the vendors would be practically giving it away,
> > > particularly if people understood the potential improvement in
> > > performance, though the difference between 1500 and 4000 is probably
> > > not all that much except on long distance ( >2000km ) paths.
> > 
> > Careful, you're rapidly working your way up to nanog kook status with
> > these absurd claims based on no logic whatsoever.
> 
> My aploligies.  It just seemed to me that the investment in SONET,
> particularly the lower data rates, should be pretty much paid back by
> now.  How long has OC-12 been around?  I can understand a certain amount
> of premium for something that doesn't sell as much but the difference in
> prices can be quite amazing in some markets. Some differential might be
> justified but why so much?
> 
> An OC-12 SFP optic costs nearly $3,000 from one vendor, list.  Their
> list price for a GigE SFP optical module is about 30% of that.  What is
> it about the optic module that would cause it to be 3 times as expensive
> for an interface with half the bandwidth?  A 4-port OC-12 module is
> 37,500 list.  A 4-port 10G module is $10,000 less for 10x the bandwidth.
> 
> In other words, what is the differential in the manufacturing costs of
> those?  I don't believe it is as much as the differential in the selling
> price.
> 
> 
> 

Once the base manufacturing cost is covered, supply and demand dictate
the price a.k.a. "you charge what the market will bear." While at least
one person/organisation continues to pay sonet/sdh pricing, that's what
will be charged.