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Business Case Analysis






Explosive traffic growth is stressing service provider's business cases. New services including video streaming, cloud services and mobile broadband are driving network traffic demand at annual rates of 35 percent to 85 percent. At the same time service providers' business models are changing so that there is no longer a simple linkage between traffic growth and revenue growth. This puts tremendous pressure on service providers' cost structures, service portfolios, and pricing policies. Service providers are looking to their systems vendors for solutions that are supported by rigorous business case analysis to help them control costs and develop differentiated and profitable new services. When selecting a systems vendor, service providers look beyond simple product by product price/performance analyses to business case analyses that extend across the market ecosystem.

Business cases can include CapEx and OpEx comparisons, service pricing, incremental revenue and churn analysis. Increasingly, service providers are engaging with systems vendors to provide turnkey solutions that include network design, construction and operation as well as sourcing of content and business planning services. Use cases, total cost of ownership (TCO), and financial modeling support are integral to such comprehensive vendor offerings.

ACG can position you as a leader by providing independent and unbiased business case analyses that are well respected in the industry. Our financial models are driven by our rigorous and comprehensive projections of market trends, market share and traffic growth. Our CapEx estimates are detailed and reflect our in-depth understanding of next-gen infrastructure. Our OpEx models are based upon more than 10 years of cost analyses performed for the industry's leading systems vendors and service providers. Analyses of new revenue opportunities leverage ACG's large database of market intelligence embodied in its subscription service offerings.

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Contact or more information about ACG's business case consulting services.

Business Case Analysis Service Offerings

Business case analyses can be developed for any of the markets covered by ACG:

  • Data Center/Cloud Computing
  • Managed Services Cloud
  • Carrier Infrastructure
  • Packet Optical Transport
  • Mobility Services
  • Video Infrastructure
Download Business Case Analysis Service Offerings

For more information about Michael Kennedy, click here.

Contact for more information about ACG's business case consulting services.

1. TCO Tool for Core Router: Router Vendor

Problem to Solve: To penetrate the core router market by demonstrating the TCO savings gained through transition to the vendor's router

ACG Research Retained:
Develop a TCO tool used in a consultative sales environment that compares the vendor's core routing solution to those of the two leading vendors

Create TCO tool and whitepaper that demonstrates 47% to 53% lower TCO over five years by capping the incumbent router and off-loading traffic to the vendor's router

  • Create modeling tool that compares TCO of incumbent vendor versus vendor for Cap and Grow and Greenfield capacity expansion scenarios for up to 50 core nodes
  • Forecast traffic growth using highly realistic and detailed traffic models for residential broadband, enterprise, mobile and wholesale services markets
  • Engineer traffic capacity requirements using Dijkstra shortest path first routing algorithm for three possible protection schemes
  • Configure automatically each router down to individual ports and line cards
  • Model OpEx for nine separate cost elements                                  

Value: The business case for introducing a new vendor into a core network must be compelling. An independently developed TCO tool that uses the service provider's own design principles helps build the required proof and trust.

2. ROI Calculator for OTT Video: Top Tier Manufacturer for Network Equipment

Problem to Solve: To provide comprehensive solution sales to broadband service providers

ACG Research Retained:
Create a ROI calculator that analyses business cases for cloud-based OTT video service

Demonstrate the value of OTT video strategies that employ "two-sided" business models and the manufacturer's policy-based routing capabilities

  • Develop ROI calculator that includes detailed modeling of video usage, churn, network traffic, service fees, demand response and advertizing revenue
  • Create six alternative business models for the delivery of WebTV services by broadband service providers
  • Support automatic generation of a custom whitepaper so that the manufacturer can work with individual service providers on their own business cases

Value: OTT video is increasing broadband service providers' capacity requirements but not revenue. Service providers are looking to their network equipment vendors for ways to increase revenue through policy-based routing.

3. TCO for Cloud-Centric Networking: Top Tier Manufacturer for Network Equipment

Problem to Solve: To demonstrate the value of cloud-centric networking for two use cases in marketing comprehensive solutions

ACG Research Retained:
Create TCO models for cloud-centric networking solutions for retail cloud computing services and video-on-demand service delivery

Calculated 47% to 53% TCO reduction by using cloud-centric networking to locate video assets closer to subscribers and 36% TCO reduction by using cloud-centric networking to reduce the peak capacity of cloud computing hosting centers

  • Build a probability model to predict the reduction of network transport expenses by using cloud-centric networking to locate video assets closer to subscribers
  • Develop a load-leveling algorithm to distribute retail cloud computing traffic among hosting centers and compute the TCO savings

Value: Service providers expect their vendors to provide complete solutions. Use cases, TCO, and financial modeling support are integral to such comprehensive vendor offerings.


4. OpEx Calculator for Connected Ethernet: Manufacturer of Transport Systems

Problem to Solve:Demonstrate the OpEx advantages of Ethernet Tag Switching for Connected Ethernet solutions as part of the sales process

ACG Research Retained:
Calculate the OpEx advantage of Connected Ethernet implementations that use Ethernet Tag Switching versus those that use MPLS-TP

Demonstrate a 32% OpEx savings over five years for Ethernet Tag Switching vs. MPLS-TP and provide a tool for use in one-on-one sales situations

  • Interview network operations experts to refine existing OpEx modeling parameters
  • Assess the status and objectives of ongoing standards activities to estimate schedule for MPLS-TP standardization
  • Create interactive OpEx sales tool
  • Write whitepaper and deliver webinar on study results

Value: OpEx carries at least five times the weight of CapEx in service provider purchasing decisions. ACG has an OpEx model that has been perfected over more than 100 engagements that can be used to support vendors' OpEx savings claims.

5. Mobile Multimedia Core TCO/ROI Tool: Top Tier Manufacturer of Network Equipment

Problem to Solve: Show prospects the economic advantages of an integrated multimedia core platform versus multiple platforms

ACG Research Retained:
Create TCO tool that compares an integrated platform with a multi-chassis solution and calculates the ROI of incremental revenue opportunities enabled by the integrated platform

Equip the sales force with a TCO/ROI tool that demonstrates the economic advantages of an integrated platform versus multi-chassis solutions

  • Automate the design and configuration of the multimedia core network elements so that they are functions of projected network usage
  • Build detailed TCO analysis that includes many OpEx cost components
  • Create incremental revenue analysis driven by variables such as the unit cost of overbilling, tiered pricing demand curve, ad insertion revenue

Value:Service differentiation and value-added service options are needed to profitably offer mobile data services. The sales force must be equipped with analytical tools that quantify the return produced by vendors' platforms.

6. TCO for OTN Core Network Offloading: Transmission Equipment Manufacturer

Problem to Solve: Support consultative sales situations with a detailed TCO tool for analysis of OTN Core Network Offloading scenarios

ACG Research Retained:
Create tool that compares TCO of core network with switched OTN versus an IP router solution

Develop tool that provides detailed analysis of the sources of TCO savings through use of OTN switching in core network    

  • Create a traffic engineering model for a 15 node core network that develops port requirements for each node using the Dijkstra shortest path algorithm
  • Configure OTN multiplexing (OYU0, OTU2) and map MPLS LSPs to OTN tunnels to compute CapEx of OTN solution
  • Configure IP router present mode of operations using traffic flows
  • Compute CapEx at the port and line card level for all alternatives
  • Compute OpEx using model refined in over 100 TCO studies

Value:Architectural changes to the core network can fundamentally alter a service provider's cost position. Such fundamental change must be analyzed in detail and leverage the best analytical and engineering minds.

What We Did:

7.  TCO/ROI for RAN Backhaul: Top Tier Manufacturer for Network Equipment

Problem to Solve: Quantify the TCO savings and ROI of a transition from TDM to pseudowire for RAN backhaul

ACG Research Retained:
Present the business case and calculate the TCO/ROI for an investment in pseudowire technology

Write a whitepaper that is used to differentiate the manufacturer's solution in a crowded market place and create a TCO/ROI tool that is used in one-on-one sales consultations

  • Refine and present the manufacturer's value proposition for pseudowire backhaul
  • Build a tool that calculates the TCO benefit of transition to pseudowire and the ROI for the investment in pseudowire technology
  • Develop realistic model of a typical RAN backhaul network

Value:The wireless backhaul equipment market is crowded with many competitors. ACG helps you stand out from the crowd with a well articulated value proposition supported by rigorous analysis.

8. TCO for Fiber to the Home (FTTH): Top Tier Manufacturer for Network Equipment

Problem to Solve: Compare TCO of E-FTTH with GPON including all costs of the Optical Distribution Network (ODN)

ACG Research Retained:
Analyze the TCO trade-offs between E-FTTH and GPON with special emphasis on the costs of building, managing and changing the Optical Distribution Network (ODN)

Demonstrate the bandwidth and flexibility advantages of E-FTTH as compared to GPON in a whitepaper    

  • Create highly realistic models of urban, suburban, and rural wire-centers including the optical distribution frame, serving area interface, distribution terminal, ONT and associated cabling
  • Project several alternative broadband service development scenarios that are anticipated over the long expected life of the ODN
  • Present trade-off analyses that demonstrate the flexibility of E-FTTH

Value: Construction of FTTH is a major public works project analogous to road or sewer construction. ACG provides the independent support and analysis needed to support these long-range commitments.

For more information about ACG Research's business case analysis service contact

Reports & Whitepapers

Jun 2, 2014 | by Michael Kennedy

Business Case: Cisco ESP and NFV

May 13, 2014 | by Michael Kennedy

Business Case for Cisco SDN for the WAN

May 4, 2014 | by Michael Kennedy

Managed Network Services: The TCO Payoff

Feb 17, 2014 | by Michael Kennedy

Business Case for BTI Intelligent Cloud Connect

Feb 17, 2014 | by Michael Kennedy

Business Case for F5 DDoS Consolidated Solution

May 30, 2013 | by Michael Kennedy

Business Case for ActiveVideo's CloudTV

Mar 18, 2013 | by Michael Kennedy

The Economics of Cisco's nLight

Mar 15, 2013 | by Michael Kennedy

Business Case for Shared Mesh Protection

Jan 31, 2013 | by Michael Kennedy

Business Cases for Brocade

Sep 24, 2012 | by Michael Kennedy

Financial Benefits of Cisco’s Elastic Core

Apr 20, 2012 | by Michael Kennedy

Economic Benefits of Cisco CloudVerse

Sep 28, 2011 | by Michael Kennedy

ASR9000 with Converged Services

Jul 14, 2011 | by Michael Kennedy

Economic Impact of Junosphere


Feb 22, 2013 | by Michael Kennedy

ACG HotSeat with Ken Osowski, Procera Networks