The Economics of Wireless in the Enterprise

 
The Economics of Wireless in the Enterprise
The economics of 802.11 in enterprise applications should be assessed in two ways: (1) by comparing
applications where the wireless network is simply less expensive to deploy than the wired network where
both applications perform the same function and (2) by examining situations where a wireless network
enables employees to be more efficient. Money saved is money earned.
You Can Take It with You when You Go
802.11 has gained wide acceptance as a technology in enterprise networks. This is because of many
reasons, including cost savings, mobility, employee productivity, and possibly layering. The origin of
wireless networks rests in the convenience of not having to run Category 5 (CAT 5) wiring in an
enterprise environment. The cost of the wire is not so high; the labor to perform the installation, bore
holes in the walls, and deface other property to run the wire increases the cost of a wired local area
network (LAN) as compared to a wireless LAN (WLAN).
Recall the timeless wisdom regarding death and personal wealth: "You can't take it with you when you
go." Although Table 8-1 may not point to an overwhelming financial advantage of wireless over wired
networks, one point to remember is that enterprise tenants that deploy wired networks can take it with
them when they go. That is, most commercial lease agreements in North America hold a proviso that
wired infrastructure must remain in the building when an enterprise tenant vacates the premises (most do
so for more advantageous rent). This is a sunk cost that enterprise tenants lose when they move to
another building space. A wireless network, on the other hand, is something that is largely, but not
entirely, portable. The deployment of a wireless enterprise network gives enterprises greater flexibility
when they are shopping for more advantageous rents because they can take their LAN with them when
they go.
Table 8-1: A comparison of installation costs: Wired LANs versus WLANs
Cost
Component
Cost per
Unit
Number of
Units
Required for
a Wired
Network
Total Cost
for a LAN
Number of
Units
Required for
a Wireless
Network
Total Cost
for a
WLAN
Cisco 1721
Router
$2,000 1 $2,000 1 $2,000
Cisco 3524
Switch
$2,000 1 $2,000 1 $2,000
Dell server $2,500 1 $2,500 1 $2,500
Laptop with
built-in 802.11
$1,500 10 $15,000 10 $15,000
Desktop 802.11
card for a PC
$1,000 1 $1,000 1 $1,000
Printer $2,000 1 $2,000 1 $2,000
Cisco 350
Access Points
750 0 $0 2 $1,500
Virtual private
network (VPN)/
encryption
$1,500 0 $0 1 $1,500
T1 $500 1 $500 1 $500
Installation
CAT 5 wire
drops/runs
$250 10 $4,000 3 $750
Totals $29,000 $28,950
Note: WLAN equipment pricing may fall faster than LAN gear as technology matures.