April 7, 1999 Web posted at: 12:03 p.m. EDT (1603 GMT) by the Network World staff

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(IDG) -- Running your network doesn't have to be so expensive. Here are ten ways to save:

Tip 1: Spiff up servers

IT pros often look for a quick fix. If data access is slowing down, for instance, the easiest thing to do might be to toss in another $36,000 server. But it might be wise to think twice. Instead of buying a new box, use an inexpensive tool, such as Microsoft's Windows NT Task Manager or Network Associates' Sniffer Basic, to isolate your network bottleneck. You may find that your network's problem can be easily fixed without that new server. Maybe some RAM will help. According to Dell's Online Store configurator, you can boost your RAM from 512M bytes to 2G bytes for about $5,400. A secondary controller and 18G bytes of external storage can also boost performance for about $11,000, according to Dell.

Now what do you have? A beefed-up server at half the price of a new one.

Tip 2: Switch off for savings

Will turning off your PC, monitor and printer save money? Let's do a back-of-the-envelope calculation. Figure each PC uses 200 watts per hour, and each monitor uses about the same. An employee works nine hours per day, which means the computer is idle for 15 hours. If it's on after an employee has gone for the day, the computer is wasting six kilowatt hours per day. At roughly 5 cents per kilowatt hour, that's $2.10 per week - chump change. But for a department of 50 people, you're paying about $5,460 per year so your employees can avoid the inconvenience of flipping two switches every morning.

Tip 3: Avoid installation fees

If you don't like paying points on a mortgage or dealer markups on hard-to-find cars, then you won't like installation fees on network services. The way out of all of these is the same -- negotiate, negotiate, negotiate.

Often overlooked, the term "installation fee" on a telecom service contract is misleading. If a carrier puts in a new frame relay network, then the installation fee -- more properly called the "nonrecurring charge" (NRC) -- seems justified. But don't expect to avoid the fee if you already have a network connection and are looking for a second permanent virtual circuit, or if you are seeking a new call-routing feature on your voice virtual private network, or with just about any carrier service you can imagine. Almost all carrier services come with NRCs.

NRCs range from $25 for a simple change order on an existing service to $1,000 for a new ATM port.

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With a competitive request for proposal on the table, the winning bidder will often agree to waive some or all of the installation fees to win - or keep - the business. Remember that many carrier representatives are compensated not on how much business they win for their company but on how much of a minimum annual revenue commitment you make to the carrier. If a carrier asks you to bump up the minimum amount of volume you commit to each year of a three-year contract, then your next question should be: Fine, will you waive the installation fees?

Don't just ask for NRCwaivers at the outset of a contract -- try to get an agreement in advance that will waive NRCs throughout the length of your contract.

Tip 4: Avoid NT sticker shock

Here is a little advice for users considering swapping their NetWare servers in favor of Windows NT. If you care about money, don't do it.

Analyst firms Giga Information Group of Cambridge, Mass., and Gartner Group of Stamford, Conn., say moving your NetWare 3.X or 4.X servers to NT 4.0 could end up costing three times as much in terms of hardware and administration costs than upgrading to NetWare 5.0. To provide the same server uptime, NT requires bigger boxes - and more of them -- than NetWare. Additionally, you will need more bodies to manage these NT boxes than you do to manage NetWare systems. And the going rate for trained NT professionals is $70,000 annually, compared with the $50,000 average salary of a Certified NetWare Engineer (CNE).

Chad Willaert, a senior systems engineer with GE Capital Information Technology Solutions in St. Paul, Minn., is working with a large corporation whose management wants to migrate the company's entire NetWare file and print operation to NT. Willaert says it wouldn't be a cost-effective move because the company currently employs only one CNE to manage 20 Novell servers, compared with the 45 engineers it would need to track 200 NT boxes.

Tip 5: T-1 access -- Forget the mileage

For decades, carriers have claimed that T-1 pricing is out of their hands. The price depends on how far your location is from their points of presence, they have said. And that's certainly still true if you go by their tariffed pricing.

But an increasing number of users are getting flat-rate T-1 deals from major interexchange carriers. To hang on to your business, the carriers will agree to set a fixed figure -- in some cases as low as $300 per month -- for all the T-1s they resell to you after purchasing them from local carriers around the country.

Still, you have to ask for the deal or you won't get it. As a negotiating tool, remember that dedicated access benefits your carrier as well as you. A T-1 can't simultaneously go to AT&T's and MCI WorldCom's points of presence. So carriers know you'll probably send additional voice and data traffic exclusively to them until you've nearly filled the T-1.

Don't expect a $300 per month rate unless you have a large network -- perhaps 50 sites or more -- and are willing to commit fairly exclusively to one carrier. But smaller networks can still benefit from the flat-rate idea.

T-1s often cost $600 to $700 once you get out of central business districts and $1,200 in rural areas. So even a $500 flat-rate deal is bound to save you money - not to mention the headache of trying to predict your network-services costs.

Tip 6: Cheap T-1s to the Net

If you think you're paying too much for your Internet access connection, you're probably right. Some ISPs are charging steep prices for a full T-1 pipe. But be advised: You're not locked into choosing UUNET (about $2,500 per month, $5,000 setup), Cable & Wireless ($1,700 per month, $300 setup) or Concentric Network (about $1,800 per month, $3,000 setup) for your Internet access.

One alternative that's growing in popularity is fixed wireless Internet access service. Some providers are charging only about $400 per month for 1.544M bit/sec of dedicated access. Compared with expensive ISPs, such as UUNET, users can save more than $2,000 per month by choosing a wireless ISP such as Airwire.net, which will install an antenna and radio on your company's roof. The Airwire.net service comes in two versions; both have a one-time installation fee of $1,850 and cost $400 or $500.

Tip 7: Put your clients on a diet

You may be spending too much for end-user computing. Over two years, National Semiconductor slashed its annual desktop total cost of ownership by more than half, from $7,600 per desktop to about $3,300.

Figure nearly $4,300 in savings for each of National's 7,400 users and you're talking about a major chunk of money - about $32 million.

National defined a standard desktop PC outfitted with the company's own inexpensive Cyrix chip and carrying a price tag of roughly $600. The PC communicates with servers that run Windows applications on top of Citrix Systems' WinFrame software, a multiuser version of Windows NT. The servers are from Dell and cost about $20,000 apiece.

National expected big software purchase savings but didn't get them, says Bob Neuberger, who manages National's thin-client technologies. The savings didn't stack up because most vendors still issue software licenses per-desktop rather than for concurrent usage, he says.

The real savings have come from areas that are somewhat more difficult to quantify. Distributing new software now takes just hours instead of months because it's loaded on a few servers instead of each desktop. In fact, some departments now update their software weekly.

Because desktops have little with which end users can monkey, technical support costs have dropped, and user productivity has risen, though again, this is hard to quantify.

Tip 8: Slash e-commerce costs

If electronic commerce is such a great way to make money, why does it cost so darn much?

Opening shop as an online merchant -- processing credit cards, maintaining customer accounts, providing catalog content with connectivity to your back-end databases -- isn't cheap. It can easily cost $500,000 or more for full-function high-end packages from BroadVision, Open Market, Trade'Ex or Connect.

The same goes for installing an electronic procurement system so your employees can buy office supplies from their desktops by checking suppliers' electronic catalogs. It might cost $20 to process a $15.76 pencil order the old-fashioned paper way. With e-commerce, that order is supposed to cost less than $1. But it costs a pretty penny to find out if that cost-savings is accurate by installing software from Commerce One, Ariba Technologies, RightWorks or Intelisys. This stuff generally costs a half-million dollars and up.

"The reason why e-commerce is expensive is the technology is very new and these are complex systems to build," says Steve Robins, an analyst at The Yankee Group, a consultancy in Boston.If you can't afford a platinum-plated e-commerce site, you may have to forego the niceties, such as extensive integration with back-end systems and the ability to provide real-time information to customers. You also may have to limit the number of transactions you can process at one time.

For online merchants, products from IBM, Intershop Communications, iCat and several other companies cost well-under $50,000. For e-commerce procurement, SpaceWorks' OrderManager almost looks like a bargain at prices of $100,000 to $250,000. The poor man's desktop procurement product is Trilogy Software's Buying Chain, which costs $4,995 for 500 users.

Tip 9: Avoid the toll trap

Do you ever pick up the phone, dial a number that you think is in your metropolitan area, and get a recording saying "You must first dial a 1 before the area code?" You are now in the intra-LATA toll zone, one of the worst sources of telecom expense leaks.

Unless you have a specific clause in your contract and have carefully programmed your PBX or other switch to deal with these calls, you're bound to be paying more for these connections than for calls across the country.

The explanation for this has nothing to do with technology and everything to do with monopolies and regulation. Under the original AT&T breakup, the regional Bell operating companies were only allowed to carry calls within carefully defined local access and transport areas (LATA). Contrary to what many people believe, LATAs are not the same as local calling areas. LATAs are usually bigger, and once you call a destination outside the local calling area but still within the LATA, the local carrier considers it a long-distance call, generating a toll charge.

Originally, long-distance carriers couldn't compete for these intra-LATA toll calls, meaning RBOCs had a monopoly over them and charged accordingly. Over the past few years, most states have allowed interexchange carriers to carry this traffic. But many users have not reset the programming tables within their PBXs to recognize this choice. The calls still go by default to the local carrier. And if there's no special contract with the local carrier, intra-LATA toll calls can run 15 to 20 cents per minute, compared with as little as 5 or 6 cents for a cross-continent call on a negotiated contract.

The solution is relatively simple. Your best bet is to go to your long-distance carrier and present it with your expected intra-LATA toll volume. Add that to your long-distance volume as a negotiation ploy to reduce all your per-minute charges. Then make sure your telecom administrator reprograms your PBX to recognize the six-digit combinations - the area codes and exchanges - that fall within the LATA but outside your local calling area.

Tip 10: Get only the management software you need

The thing about network management software that many companies don't realize is that the $50,000 to $100,000 they shell out for the software is really only the tip of the iceberg. Experts estimate that to make management software useful, most companies have to spend between three and 10 times the cost of the product for services integrating the software into the rest of the network.

If companies don't spend the time and money to fully integrate the management software, they often will get frustrated with it and let it sit on a shelf. How can this be avoided? First, determine exactly what it is you want to manage: devices, configuration, performance, service levels, whatever. Then find a specific software package that meets your needs.

There are many management tools that don't require a network management platform, but only perform specific functions. Those tools are often less expensive than a full-platform implementation, but you have to know your needs. If you only need to know how well your applications are performing, for instance, there are software packages that start at less than $10,000 from the likes of NetScout and Ganymede.

Also, don't forget some of the basic shareware tools that are available. These resources include ping,which checks if a device is available, and tcpdump, which provides data on TCP from a Unix box.