Simplifying the Build vs. Buy Decision

By Brian Wood, CP-TA/Continuous Computing

The movement of Network Equipment Providers (NEPs) from proprietary to standards-based platforms allows them to avoid hardware development altogether and focus their engineering efforts on software-based value-added features. According to industry analysts, most major NEPs are now developing xTCA-based systems. After a challenging 2009 due to the economic downturn, the market is expected to return to stable growth in 2010. The question many NEPs now face is whether to develop blades and platforms in-house or turn to third party vendors and systems integrators.

According to recent surveys by Heavy Reading and VDC Research Group, about half of NEPs implementing xTCA designs are purchasing COTS components and platforms, whereas the other half are building them in-house. As NEPs make this crucial “make vs. buy” decision, they must ask the following questions:

• What are the time-to-market implications?
• How do interoperability challenges affect us?
• What are the total cost and ROI implications?

The telecom, military, aerospace, and data center equipment markets are now hyper-competitive and fast-paced, placing significant burdens on development teams. Fortunately, the advent of robust standards, equipment based on those standards, and multi-vendor interoperability among ecosystem products now provide developers with a compelling "buy" alternative. In the face of rapid market changes and the time and cost advantages of purchased system components and platforms, proprietary hardware design is no longer a sensible approach.

Individual company R&D expenditures cannot match the large cumulative investment of the supplier ecosystem. Furthermore, a proprietary design leaves the development team working in isolation rather than leveraging the collective experience and accomplishments of others. By using a standards-based strategy that leverages the supplier ecosystem, on the other hand, a system vendor can focus its development resources on its main opportunity to add value: the applications software.

Utilizing purchased components and platforms allows NEPs to keep pace with technology and feature evolution. Recent history shows that there is no reasonable way of knowing where the next significant improvement will be required. It is virtually impossible, and very expensive, for a vendor to maintain expertise in every aspect of network equipment design so that its products can maintain market leadership or even parity. Basing the system on purchased modules and platforms, however, gives the vendor access to an entire ecosystem with its cumulative expertise. Vendors also gain access to the ecosystem's development efforts, allowing rapid acquisition of new features as they become popular.

CP-TA continues to do its part to make the “buy” decision even more compelling by defining interoperability criteria and providing test procedures and tools. The goal is to change the build vs. buy decision for the 50% of NEPs still building blades and platforms in-house.

Brian Wood is Marketing Work Group chair of the Communications Platforms Trade Association (CP-TA). You may contact him via Joe Saylor at jsaylor@nereus-worldwide.com.