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"Cisco Energy Tax" Costs Companies an Estimated $6.1 Billion Over Five Years

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posted on Sep, 17 2008 @ 06:06 PM
I keep seeing these commercials about CISCO so I thought I'd look into it.

The Message:

Stop paying the Cisco Energy Tax!

Organizations around the world have collectively spent an estimated $6.1 billion(3) more on energy expenses in the last five years than they needed to. That's more than the gross domestic product of a small country. Why? Because too many customers are unknowingly choosing a networking solution that is highly energy inefficient.

Today, Nortel is getting louder about this message - telling the market in no uncertain terms that there is a better way, a more cost-effective way, to do business.

The Calculation:

The $6.1 billion(3) number is simply sound math. Dell'Oro Group(4) research on installed data/voice networks, crunched through the Nortel Energy Efficiency Calculator, estimated how much it is costing businesses to stay with Cisco. Over a five-year period, businesses have paid $6.1 billion(3) more in energy costs to power and cool Cisco networks than they would have had they used a comparable Nortel configuration. This isn't hype - this is billions in potential savings lost that could be applied to deploying Unified Communications technologies that leverage the Web 2.0 applications to revolutionize business processes.

IDC estimates 12-15 percent of total energy costs for enterprises are network related. A Nortel data network consumes up to 40 percent less energy than a comparable network from the main competition, and can have a nearly 50 percent lower total cost of ownership(2).
cnn money

Ok , so Nortel is offering a cheaper more energy efficient alternative. But from what I can gather from this article, this is something for business and enterprises to consider.

Please correct me if I'm wrong but there's nothing the consumer can do about this, right?

Edit to add: calculator

Edit to add:

There is no doubt that energy consumption needs to be a primary focus for companies throughout the world, but is Nortel taking too narrow an approach by attacking only Cisco in its campaign? Sure, this company is the dominant player in its market, but it is very likely that Cisco will come out with its own reply and its own energy efficient spin and Nortel may be forced to rethink its tactics. tmcnet

[edit on 9/17/2008 by schrodingers dog]

posted on Sep, 17 2008 @ 07:02 PM
The response to Nortels numbers is simple...reliability and performance validate the bottom line.

Cisco networking components are among the most powerful, scalable and stable components on the market. They are reasonably priced and, in the hands of a skilled network administrator, the most powerful and secure avenues for corporate networking on the market.

Personally, I work with Cisco switches everyday. We have over 100 switches maintaining our WAN in a hostile and harsh environment. We have devices that have been in place for over 5 years, running nonstop 24/7, 99.99% uptime, and they are just as reliable today as they were 5 years ago. The oldest still has 48 operational ports (47 of which are active 24/7). I can personally attest to the reliability.

As to the bottom line, increases in energy consumption are justified since there is no replacement or maintenance on the device. The counter to that is to get a less sound system that is more energy efficient, but requires increased maintenance and parts replacement, if not entire device replacement. When you start adding that up, the energy costs begin to offset. Most would pay for a stable network versus an energy savings.

posted on Sep, 17 2008 @ 07:22 PM
reply to post by wheresthetruth

Hey wheresthetruth. I have no horse in this race and I ma definitely not a tech guy, really my interest in this story is to try to figure out how it might affect the consumer. Though it seems that this savings calculator Nortel's got going is starting to make a dent:

"I’m here at Interop and customers are getting the facts (verified by independent third parties) on Green networking (50% less energy consumption), on performance (20x better), on reliability (7x the resilience) and on TCO (50% reduction) of our networking solutions," blogs Nortel Enterprise Director - Tony Rybczynski.
"One customer (a School District) stopped processing an order for $2M of Cisco gear when they heard this story!"

"The bottom-line is that enterprises need to do due diligence and look at alternatives to Cisco in the data space. That’s exactly what this School Board is doing."

I'm sure that CISCO will respond at some point.
You seem very well informed, is this something consumers should look into?

posted on Sep, 17 2008 @ 07:38 PM
This sounds like marketing hype to me.. What makes Nortel's routers, hubs, etc that much more energy efficient? Any why attack cisco specifically? If Nortel's equipment is so much more efficient, they should be able to make a blanket statement over any other company. The commercial got me thinking about how they might derive a 40% efficiency advantage. While their software implies this efficiency exists, I do not see Nortel stepping up and making these claims. I have no idea who IDC is??? but I would definitely question the Nortel Energy Efficiency Calculator results.

posted on Sep, 17 2008 @ 07:46 PM
reply to post by mapsurfer_

I dug this up.


IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Founded in 1964, IDG had 2006 revenues of $2.84 billion and has more than 13,000 employees worldwide. IDG offers the widest range of media options which reach more than 120 million technology buyers in 85 countries representing 95% of worldwide IT spending. IDG's diverse product and services portfolio spans six key areas including: print publishing, online publishing, events and conferences, market research, education and training, and global marketing solutions.

They seem to be legit.

[edit on 9/17/2008 by schrodingers dog]

posted on Sep, 17 2008 @ 08:41 PM

is this something consumers should look into?

Primarily, this is concerning big business America. While Cisco does offer personal and small business networking solutions, this is focusing mostly on the million-billion dollar business level purchaser, including state and federal entities as well as the private and public corporate sectors.

As I read it, IDG is a media/marketting company. That alone makes me leary of any statistical data that they publish. Marketting is always about painting self or client in the most positive light. Remember what we learned from DirecTv...."90% of all statistics can be made to say anything you want them to, 50% of the time."

posted on Sep, 17 2008 @ 08:46 PM
reply to post by mapsurfer_

I agree with the market hype statement. As to why they are going after Cisco is fairly obvious. Cisco commands the largest percentage networking from the most moderate LAN/WAN to the largest of GAN. The point here seems to be that they have used the number one fear subject and have spun a web of ideas to garner support from the Green community to condemn Cisco for being energy hogs and for big business for paying and consuming said energy. Not to mention, if you tell corporate America that spending 2 billion dollars will save you 4 billion, they are going to perk right up and take notice.
I think it is mostly spin focused at trying to knock Cisco off of the peak thye have been on for so long.

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