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Building A Business Case For The New 802.11ac Wi-Fi Standard

Building A Business Case For The New 802.11ac Wi-Fi Standard
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If your organization is considering adopting the next generation 802.11ac Wi-Fi gear, here's how you can build your business case for transitioning to the new Wi-Fi standard.

The reason why business cases are so necessary in IT is that most people going into this field aren't interested in bean counting. They're here for the gee-whiz factor; they want to see faster, shinier, newer things. And that is the case with the new 802.11ac Wi-Fi standard.

What's slick about the IEEE 802.11ac hardware that's been on the market about a year now is that it is significantly faster than the 802.11n standard gear it's superseding. (In theory, 802.11ac is capable of crossing the Gigabit per second threshold, 1.3 Gbps to be exact, however the conditions that you need to reach these speeds are not yet available in a typical office setting.) Besides speed, the advantages of 802.11ac Wi-Fi gear also include better signal strength and maintenance of speed over longer distances, mainly due to the advances in antenna technologies and other enhancements, such as beamforming.

The next push to the standard, 802.11ac Wave 2, with an even higher increase in Wi-Fi speed, will be hitting the market any day, and will be followed by an 802.11ad release which is expected to be more than five times faster than 802.11ac. There's even an 802.11ax standard on the drawing boards which will be even faster than that.

MORE: Top 802.11ac Access Points Available Today
MORE: 802.11ac & WiGig: Making The Right Call With New WiFi Standards

The target is moving way too fast to tell your boss, "This is the time to invest in the new Wi-Fi standard. Seize this moment!" In New York we have a saying, if you miss a bus, another one will come along in five minutes. In the world of Wi-Fi, 850,000 buses come along every five minutes. Moving to the new Wi-Fi standard is a management decision, not a financial one; it involves the decisions of when and at what transition pace you should adopt the latest and greatest Wi-Fi gear.

Rarely do I run into a technology that I can't make a business case for, that I can't tweak the assumptions enough to entice the accountants. But here we are. That said, at some point you will need to make a case for transitioning to a newer Wi-Fi standard. Here's how you do it.

802.11ac Decision Drivers

HP offers surprisingly dispassionate advice on whether or not you need to upgrade to the new Wi-Fi standard, including:

  • If you upgrade your Wi-Fi, what else do you have to upgrade? Your current back-haul infrastructure and Power over Ethernet consumption could be stumbling blocks.
  • What effect will going from 40 MHz bandwidth to 80 MHz have? If you don't have bandwidth-constrained applications or if you don't stream a lot of HD video, you should wait until you do. Then you need to have a conversation with your network architects about co-channel interference and overlapping.

There are other benefits to 802.11ac besides speed, though. For the enterprise, Meru Networks highlights the new standard's improved robustness, reliability and bandwidth utilization efficiency. Certainly, these benefits can be quantified, as can the fact that greater density yields more simultaneous connections per access point. One thing that everyone concerned points out is not to throw out your 802.11n gear just yet. You'll want your old devices running on the old network and your new ones running on the new.

Ultimately it boils down to this: If you're content with your current WLAN or you don't have the budget to move to 802.11ac, then don't.

Making The Case For 802.11ac Gear

Let's assume that all the quantifiable benefits are concentrated in the network space, and that all of the user experience stuff is, although real, "soft" as far as benefits go. Further, the network is growing by 10 percent per year, which effects hardware, software and facilities costs, as well as labor headcount. The $200,000 fully burdened rate per network resource is held steady.

Figure 1: New Wi-Fi Standard Current State Costs

Next, let's put together the shopping list for the transition; we'll do this at a very high level. What follows is the new network licensure you'll need to run in parallel with your current-generation software, plus the staff augmentation for the project. We're also assuming that you need to amp up bandwidth for the new Wi-Fi gear and you'll require some improvements to your back-haul infrastructure.

We're going on the premise that the gear itself is rented. If that's too much of a stretch, consider the "rent" to be depreciation. In any event, we're not treating the purchase of equipment as a one-time event.

Figure 2: New Wi-Fi Standard Transition Costs

Next we need to figure out where our annual savings will come from, and what offsetting increases in the run rate there might be.

Closing the Case

The good news is that greater density and bandwidth utilization means that the growth rate for the network domain -- and its associated hardware, software, facilities and labor -- is reduced so that the current state's 20 percent annual growth can be compared, after a long runway, against a 0 percent exit growth rate in the target state.

The bad news is that the 802.11ac gear is, per unit, more expensive than the standard refresh. Published reports suggest that the typical 802.11ac Wi-Fi unit is 20 percent more expensive than its predecessor; we calculate a 40 percent uplift here to account for the increased software subscription, but this applies to hardware costs only.

In the end state, three-quarters of the wireless network will remain present-day standard to accommodate late adopters.

Figure 3: New Wi-Fi Standard Target State

In this rare case, we can assume a low discount rate of 6 percent:

Figure 4: New Wi-Fi Standard Investment Analysis

Sure, we could always speed up the adoption rate or decrease (slightly) the discount rate. This might get you to a positive case from a discounted cashflow perspective. But why bother?

In real life, you might not be able to close this business case with numbers alone either. If you can engineer it so that your Net Present Value (NPV) and Internal Rate of Return (IRR) are only mildly negative, your soft benefits -- robustness, reliability, keeping up with your employees' home environments -- could still put you over the top with the bean counters.

As always, you must include a list of risks as well. These would include non-completion and non-adoption risks but (and you should underscore this) the greatest risk would be not doing it because the new Wi-Fi standard will come to be table stakes, and if you don't have it you'll lag behind your competitors.

Business Case Resources:

To help you get your business case for the 802.11ac Wi-Fi Standard off the ground, download this Excel calculator and PowerPoint template, which you can customize to your needs.

The Excel calculator will help you determine your current state, project costs, and target state. It includes all of the inputs you'll need so you can present the final analysis. The PowerPoint template will walk you through adding the analysis from the Excel calculator so you can present the information to your stakeholders in a logical way.

  >> Download Excel Calculator
  >> Download PowerPoint Template

To get a better understanding of the key metrics and math used in these resources, take a look at How to Build a Successful Business Case for an IT Project.


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