NetSolve's Costing Tool Reveals Network's Bottom Line

Software Magazine, Dec, 1999 by Elizabeth U. Harding, John P. Desmond, Colleen Frye

"If YOU ASK MOST END USERS, they don't have a clue how much it costs them to run their networks," says Ellen Carney, director, Dataquest/Gartner Group, Lowell, Mass. On top of that, most companies also don't believe there's a cost-effective way to manage them, anyway, claims Roy Springer, senior product marketing manager for NetSolve.

Netsolve Inc., Austin, Texas, which has carve a niche in the remote network management "out-tasking" space, is on a mission t enlighten companies on both accounts. NetSolve in August rolled out an interactive network management cost modeling tool, which is available on the company's Web site. The tool allows users to compare the cost of managing a wide-area network (WAN) internally vs. out-tasking with NetSolve.

The user can enter the number of sites in the company network, and then the tool provides detailed cost information about NetSolve's management fee as well as the related hardware and software costs , amortized over a three-year period. Users can see what the model is pricing for say, asset management software; the tool allows users to change the price assumptions based on their own corporate models. The tool then subtracts that hardware/software equipment and maintenance budget from Netsolve's management fee, so users can see the operations budget, which would include staffing and benefit costs. If the costs of building and maintaining internal network management capabilities annually are more than the model's operations budget, NetSolve says its remote network management services can save a company money.

Particularly for the mid-tier market, which NetSolve targets, this type of tool is very attractive, and the availability of such tool factors into the decision-making, says Gartner's Carney. "Our research has shown [customers] love these models; they see it as a way to get their arms around what their costs are." And NetSolve, says Carney, gets a "double whammy" from this tool: as a marketing device to spread the word, and as a business justification model.

NetSolve's cost modeling tool wasn't available on the Web when Helena Chemical Co., an agrichemicals business in Memphis began researching the cost of a WAN to connect its retail sites, but NetSolve helped them cost it out. Initially, the company wanted to go with a dial-up model for the WAN, which was proposed by another vendor. But Stephen Kyriakos, director of IT, says that vendor's cost model, upon further examination, was inaccurate. He then turned to NetSolve, and worked with them to put together his own cost model for a dedicated frame relay network with 210 locations across 42 states, managed by NetSolve 24x7. That model clearly showed the cost savings, says Kyriakos, and the "gravy" was staffing resources. "I have one network engineer here and he has one manager who can also do some network engineering; with 210 sites we would need 50 network engineers at $50,000 to $60,000 a piece, which gets costly. Management said OK [to NetSolve]." Says NetSolve's Springer, "It's pretty easy to see the cost-effe ctiveness from the people side."

Kyriakos says NetSolve's cost model has also proven accurate. "These costs go out to our locations, which operate as independent cost centers. What I told them it will cost, they will hold me to, so I'm thankful the cost model was accurate."