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Farpoint Group White Paper – April 2010 
Spectral Assurance Total Cost of Ownership 
 
 
Farpoint Group thus believes that the network optimization and productivity 
enhancements of the centralized/infrastructure model are sufficient justification for 
implementing a CIM spectral-assurance solution. To introduce the impact on total cost of 
ownership, think of the CIM strategy as converting expensive, personnel-centered 
operating expense into greater but more efficient capital expense. But it’s also important 
to consider that spectral assurance is also a bit like an insurance policy, with an 
opportunity cost assigned to not having it at all. So we assume that an SA capability is 
essential, and that the fundamental cost analysis is between the WAM and CIM 
approaches, not with respect to whether SA is valuable or not. It is, and very. 
 
 
Building a TCO Model of Centralized Spectral Assurance 
 
Any model of total cost of ownership has two components: capital expense (CapEx), and 
operating expense (OpEx). Capital expense includes all required equipment, planning, 
installation, functional verification, and related non-recurring engineering charges, which 
are most often only a small percentage of the cost of the equipment required. Operating 
expense includes all expenditures related to ongoing operations, including network 
management, troubleshooting, remediation, user support, maintenance, and many other 
functions. 
 
Over time, the OpEx is usually much larger than CapEx, and for a simple reason. While 
CapEx largely depends upon the cost of manufactured products, which almost always 
declines over time and which benefits from improved price/performance regardless (often 
noted in the press as the “faster/better/cheaper” typical of high-tech products), OpEx is 
essentially labor-intensive, and costs here demonstrate the opposite property – they 
almost always increase over time. The best way, of course, to address rising labor 
expense is to improve productivity. The centralized model of spectral assurance can most 
certainly do this, as it converts staff-oriented walking around into centralized, continuous, 
infrastructure-based monitoring and analysis, along with appropriate automation in 
response to detected problems and issues. And, of course, the requirement for direct labor 
to do all that walking around is dramatically lessened and even eliminated in many cases. 
 
In a centralized spectral-assurance solution, assuming that the required sensors are 
resident in devices that can also function as access points, the bulk of CapEx involved in 
greenfield (pervasive) deployments is the differential between the cost of a spectrally-
enabled AP and one that is not. Depending upon model, this might amount to a few 
hundred dollars per AP. In augmenting existing deployments, Farpoint Group generally 
assumes a 1:4 to 1:6 relationship between spectrally-enabled APs and others. While some 
compromise in capability is inherent in a partial deployment, the cost can be quite low. In 
addition, it may be necessary to perform functional verification on a client-type basis 
against two different APs in the partial case, but these costs should be quite low and are 
regardless a function of local policies and procedures. The only other cost is that required 
for an appliance to implement location functionality; again, this is quite minimal given 
the overall cost of the installation. The incremental cost of adding centralized spectral