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The Price is Right for Enterprise Wireless

LR Mobile Column
LR Mobile Column
LR Mobile Column
1/27/2005

You can talk about the benefits of wireless LAN – productivity, convenience, trendiness, etc. – until you're blue in the face. You can even talk about the knobs, buttons, and the relative technical merits of different wireless "solutions."

But at some point, you just want to know how much it's all gonna cost ya.

So here's the scoop: somewhere around $600 to $800 capital cost per multimode (a/g) access point deployed for switch-based systems on orders around the $100K mark, and between $700 and $1,000 on orders around $30K. Add between 10 percent and 30 percent for professional integration services. [Ed. note: You weren't thinking of installing it yourself, were you?].

These ballpark figures are pulled from Unstrung Insider's new Enterprise Wireless LAN Price Report, which tracks the prices of 17 enterprise-grade, standalone access points, 10 appliance/gateway products, 35 wireless switch products, and 16 thin access points from 18 different vendors.

Sure, you can find cheaper deals out there; and you could certainly end up paying a little more because you value this or that feature. Likewise, you'll see variations in price depending on your network configuration, which determines factors such as your access-points-to-switch ratio. But by and large, this is what resellers, integrators, and vendors say you'll be paying.

And, it seems, the prices of wireless switch equipment won't tumble drastically in 2005. According to the report, switch products have, so far, managed to weather the savage market conditions in the standalone, enterprise-grade access point market, which now more closely resembles the price-driven consumer market than a systems-level enterprise play.

Several credible sources say Cisco Systems Inc. (Nasdaq: CSCO) has been aggressively cutting the price of its Aironet access points – the segment's lead product – in an attempt to maintain market share, and that this is having a ripple effect on the rest of the market. If you don't believe our sources (who will remain anonymous), check Proxim Corp.'s (Nasdaq: PROX) profit warning, released in the dark days of December 2004, which talks of "unforeseen Wi-Fi pricing action from Cisco Systems, Inc. and resulting pricing pressure" (see Proxim Plummets on Q4 Cuts).

From a customer perspective, of course, price cuts aren't such a bad thing. The standalone products work as well as they ever did, and you could go buy a bunch of discounted access points, install something like a Bluesocket Inc. wireless gateway behind them, and end up with a very price-competitive and relatively sophisticated network.

Price cuts for switch-based systems are also inevitable over the medium- and long-term – and everyone knows it. But for 2005 at least, the extra functionality and reduced management overhead you get with a wireless switch means these products will continue to demand a modest price premium in the market. The time, and the price, is right to go wireless.

— Gabriel Brown, Chief Analyst, Unstrung Insider

The Enterprise Wireless LAN Price Report is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900.

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