FlexTCA Value Proposition DiagramIt is common for people to assume that buying a telecom platform is much more expensive than developing one in-house – but this is a myth. The Make vs. Buy decision is not just about purchase price, but about profitability over the entire product lifecycle.

When factoring in both direct and indirect costs as well as the value of delivering a product early in the available market window, purchasing a standards-based, pre-integrated telecom platform is actually quite smart.

3, 2, 1: Outsourcing Make Sense

Click to request a PDFOur research indicates that it takes about 3 years for a network equipment provider to build a complete system in-house, 2 years to integrate one from Commercial Off-the-Shelf (COTS) building blocks, and only 1 year to create and deploy an application on a pre-integrated platform like FlexTCA – or much less if the application already exists. These are big differences that impact product profitability and success.

Many equipment providers miscalculate that it should be easy and fast to integrate COTS building blocks for their platform – but time after time, the lesson is re-learned that integration of standards-based components is not simply a matter of “plug and play”. Far from it.

Cut Time, Boost ROI

Time has value, and getting to market 6, 12 or 24 months sooner generates tremendous strategic and financial advantage. Victory goes to the swift, and our detailed financial modeling shows that network equipment providers can cut product delivery timeframes in half while achieving up to a 50% increase in product lifetime ROI (Return on Investment).

A customer that focuses solely on application development while outsourcing the underlying platform needs fewer in-house resources for research and development (R&D), supply chain management, interoperability and regression testing, etc. Those overhead items cost money, so lifetime project profitability (operating margin) can be higher with outsourcing.

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Please contact us and learn more about the Make vs. Buy decision. Be sure to ask about our interactive Excel-based ROI tool.