August 31, 2022

Procurement and Vendors Manager

Cost Avoidance and Cost Savings with DriveNets Network Cloud

A cost is a cost is a cost, right? Well, not exactly.

Procurement people differentiate between “cost savings” and “cost avoidance.” In short, cost savings refers to costs saved at present, while cost avoidance refers to costs not incurred in the future.

This simple distinction is important, since looking at both can make a big impact on your organization’s bottom-line. Let’s take a look at how DriveNets Network Cloud can help reduce costs both now and in the future.

Cost Avoidance and Cost Savings with DriveNets Network Cloud

Save costs today

Most networks today are hardware-centric. Basically, these networks have been built the same way over the past three decades, with many different proprietary network-specific hardware devices. Not only that, but these hardware-centric networks are typically operated in silos, where each domain (e.g., broadband, mobile) has its own dedicated hardware resources.

Such hardware-centric networks are not taking advantage of newer software technologies that enable improved economic models, better resource utilization, and high service scaling. Regarding utilization, for example, only some 30-40% of hardware-centric network capacity is utilized, while cloud utilization of hyperscalers (e.g., Google, Facebook/Meta) is around 80-90%.

Today, the networking boxes (chiefly routers) that are the building blocks of hardware-centric networks cannot share their resources. This means they cannot be used for multiple network applications simultaneously, like hyperscalers do with their clouds.

Traditional network vs DriveNets network cloudTraditional-network-vs-DriveNets-network-cloud

DriveNets introduces a modern way of running and managing networks – just like cloud. With DriveNets Network Cloud, the network infrastructure is a shared resource leading to significant cost savings through higher resource utilization and economies of scale. DriveNets Network Cloud offers multiservices over one shared infrastructure, like hyperscalers do, offering both routing and third-party network applications over the same network device.

On top of that, DriveNets network architecture, in contrast to the hardware-centric model, uses just two types of basic commercial off-the-shelf (COTS) building blocks that are available from multiple vendors. The same hardware can be used across all network types (mobile, broadband, enterprise) and configurations (core, aggregation, edge). The bottom line is that this open hardware is less expensive to purchase, inventory and maintain than closed legacy hardware.

Avoid costs tomorrow

Now let’s look at cost avoidance when it comes to routing and non-routing hardware.

Network planners and procurement professionals usually have a tough choice when choosing a closed and inflexible network routing device for a specific network location.

One approach is to choose a device optimized for immediate capacity requirements. On the downside, the device will require replacement when traffic and services exceed its capabilities. When such a network box advances towards 70% capacity, typically the network team will urgently ask for more budget for a bigger box (lift & shift procedure).

Another approach is to invest in a larger device capable of handling future requirements. Unfortunately, this means high up-front CapEx and a large footprint of a partially populated box with initially underutilized network resources leading to further indirect costs (more on that below). Clearly, neither approach is ideal.

DriveNets Network Cloud disrupts traditional network economics by aligning network costs with capacity growth. Stacking of low-cost white boxes for incremental capacity upgrades on an as-needed basis – just like in cloud environments – lets you scale-out when and where needed. This avoids costly and unnecessary up-front investments and future upgrades.

Traditional-netwrok-device-vs-DriveNets-network-cloud

Another key issue for procurement is the costs of non-routing devices. Typical network architecture includes some non-routing functions (such as security). Such functions usually require adding purpose-built hardware appliances that increase both direct “hard” costs (e.g., the hardware itself) and indirect “soft” costs (e.g., cooling and rack space consumption). Both types of costs become significant as the network scales and the traffic passing through these functions increases.

With DriveNets Network Cloud, however, those functions are added as service instances onto the existing cluster infrastructure. Just like installing and running apps on smartphones or clouds, additional containers are added via software. In most cases, no additional hardware is required, leading to cost avoidance of the additional non-routing hardware.

Traditional-netwrok-device-vs-DriveNets-network-cloud-2

DriveNets empowers the procurement team to implement cost savings and cost avoidance measures on a network scale – saving the organization significant costs both at present and in the future.

Download eBook

5 Reasons Why You Should Include DriveNets in Your Next Network Bid Process

DOWNLOAD