Hardware Infrastructure Global Viewpoint – July 2017

The Lowest Price Can Cost You

The introduction of Consumer-Off-The-Shelf (COTS) technology to video equipment is supposed to save money. Lower cost products, faster delivery. What’s not to like? The adage “You get what you pay for,” remains true today. Let’s see why.

Broadcast and media engineers, managers and IT leaders have been fed a continuing line about the benefits of using Consumer-Off-The-Shelf solutions in new digital equipment. The primary benefit is lower price.

Sales people will tell you COTS technology in media products results in better performance at lower prices. Yes, there are advantages, especially as the industry moves to IP infrastructures at an ever increasing pace.

But just a warning, that COTS technology you just bought could end up costing you more than a traditional broadcast and production solution.

Beware what you ask for

I spent more than 12-years working at a state-funded radio station. Every product costing more than $25.00 had to be let out for bid. While that alone was sufficient to pull one’s hair out, the second part of the bidding process was even more problematic.

Suppose the station engineer needs to buy a recording mixer. In each case, the purchasing specifications must be sufficiently generic and not tailored to only one vendor. Once the mixer specifications are submitted by the engineer, the purchasing department requests bids for a comparable device/solution. The winning bid is the one having the Lowest Price Technically Acceptable (LPTA). 

The engineer asked for a 12-input audio mixer and the purchasing department accepted the bid for a mixer with 12-phono jack, line-level inputs for $50.00. But wait, you wanted a professional mixer with XLR inputs, LED metering and equalization on each input channel. Expected cost, $5,000. The State buyer said his $50.00 mixer is LPTA equivalent.

Similar results can happen when a vendor, proclaims her product relies on COTS technology, and meets all of your specifications and is available at a lower price than the competitor.

Hidden costs

A central fallacy of COTS being a better solution lies in defining the exact need. If you ask for a 10GbE router, there are hundreds of options. Choose one.

But wait, the router also requires optical ports and dual power supplies. How many ports, wired or wireless? As specificity increases, lower-cost products may no longer meet the solution's needs.

A recent blog post from a Cisco engineer posits the idea that treating IT products as commodity items can lead to disaster. From the article; As a rule of thumb, 70 percent of an IT budget is usually allocated to operations and maintenance, while only 30 percent is allocated to new procurements. In many data centers today, power consumption is only now being measured and reported, even though it is clearly an associated cost. 

Moreover, OEM hardware and software providers are rated by how inexpensive their solutions are. Often the result is a solution that looks very similar to one requested years prior, and uses hardware nearing the end of its lifecycle.

Imagine if you bought a new car that had been setting in a warehouse for four years before you purchased it? In LPTA, innovation dies because the integrator is unlikely to take a risk for such a minimal return, nor is an equipment provider going to give away features for free.

In IT speak the corollary is clear: If we remain focused on the most fundamental requirements — that the network has to be capable of transporting data — we ignore some crucial areas which should also be evaluated.

For example, imagine if you could reduce 67 percent of your management costs through automation? In a recent deployment of our newest Software Defined Access portfolio, our management consoles and our automated management and policy enforcement, we were able to reduce a commercial company’s human involvement by just that number. Two-thirds of the operating staff are able to focus on more important things because common tasks are now automated

But there are several other areas that routinely arise from the commodity focus over a total cost of ownership. Factors including equipment lifespan, re-training of employees on different technologies, gaps created by OEM inter-operation, and dozens of others all combine to create a significant red flag for IT and acquisitions leadership, and one which is likely to get a little worse before it gets better.

Integrated solutions beat piecemeal evolutions

Lastly in the cost of acquisitions, the customer’s goal is often to simplify the workflow and move away from the traditional siloed domains. The goal needs to be where we look at individual aspects of IT, and recompile them in workflow that standards-based engineering results in a “plug and play” model for users.

IT purchased solutions must be more than the latest COTS gear. The products need to enable new and faster workflows.

IT purchased solutions must be more than the latest COTS gear. The products need to enable new and faster workflows.

When considering competing solutions, it’s not always obvious which is the best answer. Other major procurements can offer guidance, though. Look at the vendor’s previous installations and products. Broadcasters often claim to want “best of breed.” That’s great until multiple products and vendors need to work together to create a whole workflow. This tactic requires either a system integrator or the facility engineers to weave all the pieces together into a coherent whole. Such a solution may not always result in a best approach.

Rethink the entire solution

Redefine how you look at IT today. It has to be comprehensive and capability-focused. Instead of simply buying a router or a computer or a server, look holistically and evaluate IT like it was any other piece of complex equipment.

You would not purchase a playout video server and then tell the vendor to leave out the hard drives because you were going to install your own. The purchased solution needs to be a working solution.

Just because someone tells you to buy COTS-based products, doesn’t mean they will work in your application. Media is special and not all of today’s IT-centric products will measure up.


Cisco blog by Jason Port:

Low price can be expensive

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