Can firms afford to delay upgrades?

The rising price of copper is making the cost of network upgrades increasingly hard to swallow

Flashes of lightning, deafening cracks of thunder, rain gushing down – yep, it must be a May bank holiday. As the hailstones pelted the lawn, half killing any small animal sticking its head out to check when the sun would reappear, the kids settled down to check out the holiday TV extravaganza (as if).

In fact one of the telly adverts did catch my eye. Elastoplast was advertising its latest plaster, which is coated with metallic silver to treat grazed knees and elbows to an anti-microbial silver ion shot. The idea was no doubt spurred on by washing-up liquid manufacturers adding bactericides to their products, but being a Hammer-horror fan, the new plasters did get me wondering whether they would be effective against werewolf and vampire bites – think of the Transylvanian market.

What has this got to do with networks, you ask. Well, I was thinking of how much the silver in these plasters costs. Over the past five years the price of silver has tripled, and an ounce now goes for more than $12. The main movement was over the past year in line with oil prices going through the roof.

What about copper, a more important commodity for networks? This has hit nearly $4 per pound, over four times the price in the year 2000. So firms thinking of upgrading their cabling to support Gigabit Ethernet or even 10 Gigabit Ethernet (10GbE) may find the capital costs bite a bit harder. And for firms moving to IP telephony or putting in a Wi-Fi network, there may be a requirement for Power over Ethernet (PoE) that specifically means copper and excludes optical fibre.

So companies that recabled early to move to gigabit or 10GbE may have reason to crow, because they will have paid less to move to a faster network.

Analyst company Gartner has suggested that many firms are upgrading their networks by the time-honoured method of adding a zero onto hardware speeds, without considering whether such a big speed increase is actually needed. G artner’s figures show that in 2005 the number of network ports shipped increased by nine percent, revenue was up seven percent and gigabit switches accounted for 61 percent of the near $13bn total.

Firms’ 100Mbit/s switches, while not exactly out of date, might be a bit long in the tooth, not just physically, but also with respect to some of the services they can offer. Some of the older switches, for instance, lack the fine-grained quality of service (QoS) features available in some of the newer models.

So do you upgrade to new 100Mbit/s switches with the Layer 4 to Layer 7 services you require, do you add the PoE option to your feature list, or do you go for a full gigabit PoE option? The answer will depend on your business needs, but if the oil price goes higher, your CFO will need more than a silver-coated plaster to fix the budget.