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Wireless or Ethernet LAN? An apples-to-apples cost comparison

Now that 802.11n has made wireless LAN faster and more reliable, network administrators are wondering: Wireless or Ethernet LAN? Until now Ethernet replacement hasn't been feasible, but 802.11n WLAN benefits are much more tangible now.

In these tight economic times, companies are challenged to do more with less and quantify total cost of ownership...

(TCO) and return on investment. One area where WLANs are readily able to demonstrate rapid payback is their ability to avoid the cost and complexity of in-building Ethernet. Implementing WLAN also enables applications such as VoIP in a fixed-mobile convergence setting that can result in drastic savings.

Wireless LAN vs. Ethernet LAN: Drilling into the costs

To deploy an Ethernet LAN, one must pull Cat5e or Cat6 cable (where necessary, replacing older Cat5 that cannot support today's high-speed LANs). Cost varies by venue and building material, but older buildings present bigger challenges because of inaccessibility, aesthetics and (sometimes) the presence of asbestos. For purposes of comparison, let's assume $200 per in-building cable drop to a single Ethernet station. Each cable drop terminates at an edge switch port -- here, we will assume a 10/100 Fast Ethernet port runs $35.

To deploy an 802.11 WLAN, one still needs to pull a few cables. Each AP usually requires its own cable drop, but that drop is used to support many wireless clients. For comparison purposes, we will estimate 25 clients per radio for a $1,300 dual-radio AP. Furthermore, most enterprises use 802.3af Power over Ethernet; one port and drop per AP take care of power delivery. The AP itself also requires installation -- slightly more effort than a cable drop alone, so estimate $250 per AP. Finally, most enterprise WLANs now use controllers to supervise APs (typically $10K to $20K -- we'll use the $15K average for our calculations).

As the following table illustrates, WLANs are less expensive to install even for relatively modest workforces. Those savings grow along with the size of the workforce as the cost associated with WLAN controllers is further amortized.

  Ethernet WLAN
Ethernet/PoE Port $35 $35
Installation $200 $250
AP - $1,300 (50 users)
Controller - $15,000 (50 APs)
Installed Cost for 100 users $23,500 $16,585
Installed Cost for 1,000 users $235,000 $46,700

In small/remote WLANs, capital expenditures can be reduced by using autonomous or hybrid APs that do not require a local controller. With 802.11n, wireless backhaul can also be used to replace cable drops to APs mounted in hard-to-wire or outdoor locations where Ethernet is prohibitively expensive (although power is of course still required in those locations).

This is a very simplified analysis. Further costs include site surveys, RF network design, AP/switch configuration, management tools, and security sensors. However, even when those one-time investments are factored in, WLANs still compare very favorably with wired Ethernet. In addition, WLANs are faster to install and modify, making it possible to rapidly connect new and temporary workplaces.

Voice and fixed-mobile convergence: More 802.11n WLAN benefits

Many companies plan to use mobile Voice over IP (VoIP) savings as the way to pay for their WLAN investment. However, early VoIP deployments over 802.11bg often proved more expensive than hoped. Legacy APs frequently lacked the capacity to support many concurrent voice calls. They also had to be very densely deployed to ensure the coverage needed to sustain toll-quality voice calls.

With adoption of 802.11n, enterprises have a better chance to tap not only mobile VoIP but also fixed-mobile convergence. 802.11n delivers the increased capacity required to support multi-media applications over a single converged WLAN. While VoIP does not require high throughput, it benefits from 802.11n's improved reliability and coverage. Furthermore, enterprises will not be forced to dedicate 802.11n APs to support VoIP. With prioritization, the same WLAN can be used to effectively support data, video conferencing, and streaming media.

In a study conducted by Forrester Research, organizations that had deployed voice over Wi-Fi had achieved two readily measurable benefits: improved mobile worker productivity and reduction in cellular charges.

Letting workers answer calls on IP phones from any on-site location saved 30 minutes per week that would otherwise have been wasted moving to spots with decent cellular coverage, Forrester estimated.

Avoiding $69 per month per employee in cellular charges saved a representative company with 1,000 mobile workers $828,000 per year, according to Forrester.

The companies that Forrester studied also reported numerous qualitative benefits, including increased employee availability through unified messaging, better employee collaboration, and improved customer satisfaction resulting from process improvements like enhanced patient care made possible by mobility.

Of course, these benefits do not come without investment. In addition to the WLAN itself, businesses must purchase VoIP handsets, IP PBXs and mobility servers. But when done right, these investments can be recouped fairly quickly -- in Forrester's case study, the average payback period was just nine months.

Looking ahead

Today's deployments may be focused on achieving the aforementioned benefits, but these new-generation WLANs are also creating a platform upon which to build many new applications. For example, Gartner speculates that the next phase of WLAN-based applications will leverage locationing and presence services.

From sensors that track inventory movement and wireless surveillance cameras to applications that find employees and deliver content-aware information, wireless can be used to do much more than simply connect devices to networks. Each of these new applications represents yet another opportunity to do more with less, further offsetting the WLAN's total cost of ownership.

About the author:
Lisa Phifer is president and co-owner of Core Competence, a consulting firm focused on business use of emerging network and security technologies. At Core Competence, Lisa draws upon her 27 years of network design, implementation and testing experience to provide a range of services, from vulnerability assessment and product evaluation to user education and white paper development. She has advised companies large and small regarding the use of network technologies and security best practices to manage risk and meet business needs. Lisa teaches and writes extensively about a wide range of technologies, from wireless/mobile security and intrusion prevention to virtual private networking and network access control. She is also a site expert to SearchMobileComputing.com and SearchNetworking.com.

This was last published in January 2010

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