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Feasibility Study for a Statewide Higher Education Information Technology Network
State of Connecticut, September 18, 1996

Cost of Recommended Technology Scenario

  • Prices for ATM carrier services are comparable with other technologies. For example, ATM T1 rates cost $1,000/month (per site) and T3 rates (which few of the other technologies provide) cost $3,500/month (per site). ATM hardware investments, however, are slightly larger than similar investments for other technologies. A single ATM switch equipped for video, for example, might cost around $28,000. When one examines the functionality offered by this technology (both present day and future), ATM services are definitely worth the investment.
    • Not all sites will require ATM hardware to connect to the ATM backbone. The study identifies connectivity alternatives that utilize existing router technology. The costing estimates put forth in this document can change dramatically depending upon the number of sites actually requiring full ATM services.
    • If K-12, libraries, etc. are incorporated into the initial vendor bidding process, economies of scale can greatly reduce the costs associated with implementing a statewide network.
    • As is the case with most technologies, the costs put forth in this document will decrease with time.
  • A statewide network might also provide a variety of additional services to its constituents, such as Internet access, remote dial-in to network resources, and videoconferencing capabilities. Furthermore, special attention must be given to the security and management of the network. For these reasons, the State of Connecticut will most likely have to purchase a variety of different pieces of hardware that are exclusive of the ATM networking equipment. This includes Internet firewalls, communications servers, and network management solutions. In addition, the State will have to devote specific human resources (whether in-house or via a third party) to the management and maintenance of this network.
  • The State will require individuals to manage and maintain the network infrastructure. Even though hardware installation, configuration, and maintenance will most likely be outsourced to a third-party provider, several management roles will be required in-house. This includes a service manager to handle vendor negotiations and disputes between constituents; an operations manager to handle day to day operations and planning issues; and a technician to handle any inter-institution technical issues. Typically, an individual with MIS skills will cost the State of Connecticut $100,000/year.
  • It is recommended that the State of Connecticut allocate funding for the training of faculty, administrative staff, and MIS personnel in the proper usage of a statewide network. As a rough estimate, a single course in a specific subject matter will cost approximately $1,000. The total cost to the State will depend upon the number of individuals requiring training, the degree of training, etc.

 

Summary of Costs

    Total Cost
(33 sites)
Estimate Cost per additional site
Investment Costs
  1. Voice $0
  2. ATM Data and video services and hardware $990,000
  3. Other Services and Hardware (Internet access, firewalls, network management, remote acess, and videoconferencing equipment) $1,266,000
$2,256,000 $30,000
Ongoing Costs
  1. Voice (intra-state) $0.05/minute
  2. ATM data and video services and hardware (annual cost) $1,386,000
  3. ATM hardware maintenance (annual cost) $150,000
  4. Other hardware services and maintenance (annual cost) $284,000
  5. Human resources (in-house and outsourced annual FTE costs) $600,000
-> $0.05/minute (voice)

-> $2,420,000/year for
data and video

> $0.05/minute (voice)

-> $3,500/year for
data and video


Page
Number
Executive Summary
Table of Contents
Introduction
12 Current Situation
13 Problem Statement and Impact Analysis
16 Benefits of a Statewide Network
17 Applications of a Statewide Network-Other States
18 Applications of a Statewide Network-Connecticut
20 Possible Technology Scenarios
21 Recommended Technology Scenario
22 Costing Model - Assumptions
23 Scope of Cost Model
25 Cost of Recommended Technology Scenario
26 Other Recommendations
30 Implementation Strategy
 

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