Up-close and personal: Cat 6 return-on-investment

In June 2002, the TR-42.7 Copper Cabling Systems Committee of the Telecommunications Industry Association (TIA) approved certification of specifications defining the Category 6 standard for telecommunications cabling (ANSI/TIA/EIA-568-B.2-1). Since then, much discussion continues among system designers and integrators, contractors and installers relative to the intrinsic value—performance and financial—of Cat 6 and its ultimate implications for their customers and their businesses.

While Category 6 cable is specified to 250 MHz, Belden's DataTwist 600e is engineered to perform to 600 MHz, utilizing the company's Bonded-Pair technology and a patented e-Spline design.Click here to enlarge image

To make profitable, long-term business decisions, organizations—and the vendors, distributors and contractors who serve them—need to consider three things: Where have we been? Where are we going? How will we get there?

Whether choosing a structured cabling system or enterprise software solution, this is the most sensible approach to gaining value and return-on-investment (ROI) from technology investments.

When Cat 5 (TIA/EIA-568-A) appeared on the scene in 1995, choosing the standard was a relative "no-brainer" for enterprises looking to rewire. Likewise, when Category 5e (TIA/EIA-568-B) was certified in May 2001, the industry's progression to the new standard was swift and unchallenged. The benefits were obvious: Even with minimally compliant Cat 5e cabling (maximum test frequency 100 MHz), you could realize improvements in electrical performance at a relatively slight increase in cost. Category 5e cables could reliably support earlier Cat 5 applications, from 10Base-T to 100Base-T, and could also support the newer high bandwidth applications coming along, such as Gigabit Ethernet (1000 Mbits/sec).

When cables designed to exceed Cat 5e specifications (maximum test frequency 200 to 350 MHz) hit the market— along with vastly improved patch cords, proprietary technologies (such as Belden's Bonded-Pair), and other design and performance improvements—the benefits for the premise networking market grew exponentially.

The next step forward

Making the decision to step up to copper-based Category 6 cabling, however, requires somewhat deeper analysis. The higher cost of the cables and the additional equipment and/or software needed to properly test and certify network performance may discourage companies looking only at upfront costs, as well as specifiers primarily concerned with winning the project bid.

But the long-term business case for selecting Category 6 cabling over Category 5e is based on value delivered rather than on cost alone. When it comes to technological superiority, Category 6 is the clear winner. Because Category 6 supports positive power sum attenuation to crosstalk (PSACR) channel margins up to 200 MHz, systems built on the new standard provide double the bandwidth of Category 5e cabling. Category 6 improves data throughput thanks to much better signal-to-noise ratio, and also offers better isolation from external noise and improved electromagnetic compatibility performance.

As the guaranteed PSACR, measured at 100 MHz, rises from minimally compliant Category 5e to enhanced Category 5e, and to minimally compliant Category 6 and enhanced Category 6 cabling, the dollars per dB of PSACR falls. Using this method can help customers understand how Category 6 can deliver greater value for their money. (Costs shown are for cable only; they do no include connectivity or termination devices.)Click here to enlarge image

In addition, because of the interoperability, testing and "backward compatibility" requirements imposed by the standard, all Category 6 cables (when installed with certified Cat 6 patch cords and connecting hardware and components) are designed to support all legacy applications supported by Categories 3, 5 and 5e, while providing ample capacity to handle emerging and future high bandwidth multimedia and multi-Gigabit applications.

But when it comes to choosing between Category 5e and 6 cables to support current and future applications, how do you measure price versus performance? Two possible methods come to mind.

ROI at many levels

The first, used to measure the upfront investment for cable, might be termed "Dollars Per Decibel." In this methodology, shown in the figure at left, you compare the guaranteed PSACR at 100 MHz of various types of cable, and also the cost in dollars per dB for each type, using typical marketplace pricing for an average length of cable required for a single cable run.

Using this reckoning, a minimally compliant Category 5e cable delivers a value of 10.3 PSACR, or $9.49 per dB; and the high-end Cat 5e cable delivers a value of 17.1 PSACR, or $6.01 per dB. The minimally compliant Category 6 cable delivers a value of 22.5 PSACR, or $5.09 per dB; and the high-end Cat 6 cable delivers a value of 31.4 PSACR, or $4.19 per dB.

What this shows is that Category 6 actually delivers significantly higher performance levels at a lower cost per decibel than Cat 5e. The same methodology can be applied in comparing other critical electrical performance values between Category 5e and Category 6.

Installing an enhanced Category 6 cabling infrastructure, even before current applications require it, can deliver lower total-cost-of-ownership over the long term. Estimated costs shown are based on minimally compliant Category 5e and enhanced Category 6 cable, 500 drops, with average industry mark-ups applied. (As in the figure Dollars per Decibel, costs shown are for cable only.)Click here to enlarge image

Another comparison can be deployed to measure cable cost versus value over time. This methodology, as shown in the figure above, might be termed the "Depreciated Cost of Install" (for cabling only—not including termination and connectivity components).

Here's how it works:

Company A wants to install or upgrade a structured cabling system in 2003 to support its Gigabit Ethernet network. After evaluating marketplace offerings, they select minimally compliant Category 5e cable, mainly because of its lower price. Figuring in typical industry mark-ups, the total cost comes to $48,893. In 2007 (or perhaps sooner), communication needs increase and the then-ratified 10-Gigabit Ethernet over copper makes good business sense, necessitating an upgrade from Category 5e to Cat 6. This time, the total cost of installing an en-hanced Category 6 cabling system comes in at $63,363. This means that, in just a five-year period, Company A has had to invest more than $112,000 in cable upgrades, not to mention the additional costs incurred to ensure Cat 6-compatible components. And, from an accounting standpoint, Company A will only be able to depreciate the cost of each installation over two five-year periods.
Company B also decides to install a cable system in 2003. Realizing, however, that its communication needs will more than likely increase over the next several years, this company decided it was worth it to spend more upfront to protect the longevity of its investment. They opted to deploy an enhanced Category 6 system, which costs $65,809, including typical industry markups. Will Company B have to increase its cable investment in 2007 when they decide to implement 10-Gigabit Ethernet? Absolutely not—because they had the foresight to install a more robust system that would support both current and emerging applications. In addition, from an accounting standpoint, Company B will be able to depreciate the cost of the single installation over a 10-year period or more.

Sound farfetched? The same thing happened in the mid-1990s when many organizations installed minimally compliant Category 5 cables and then had to upgrade to Cat 5e when 1000Base-T came about. If they had installed an enhanced Category 5 cable originally, they would not have had to invest in such an upgrade.

These examples illustrate how Total Cost of Ownership (TCO) and Total Customer Value (TCV) must take into account not only the initial outlay, but costs over time and value delivered. To get this message across to corporate customers and other large organizations, cabling contractors may find it useful to adopt a variation of the methodologies explained and illustrated here. As more enterprises adopt a long-term, value-based approach to their technology infrastructure, contractors will no longer feel they need to underbid or reduce profit margins to get the job.

The trend towards taking a closer look at TCO is gaining traction across many kinds of enterprises. One organization using Category 6 to great advantage is the Louisiana State University Health Sciences Center (LSUHSC).

Back when the standards were still being developed, LSUHSC made the decision to standardize its New Orleans Gigabit Ethernet LAN and statewide WAN on a Category 6 structured cabling system. The system is being installed in 15 buildings on campus and 20 remote locations around the state. It supports Gigabit Ethernet to the desktop, as well as a host of sophisticated applications, such as distance learning and teleconferencing, telemedicine, digital radiology and medical imaging research.

According to network manager Raymond Sonnier, "In the final analysis, we decided to standardize on the Cat 6 UTP cable because it was less expensive to buy, install and maintain than a fiber system, while offering a high value proposition in terms of performance and capacity. This project ensures that we will achieve our goal of having a cabling framework to meet our needs for the next decade, at least."

High value proposition

Your specialized knowledge and expertise are important to helping your customers see their cabling investment from a future-proofing and TCO point of view—and that Category 6 structured cabling systems can be the most cost-effective way to go. After all, for many (if not most) of your customers, the ROI of guaranteed high performance, maximum network uptime and long-term reliability is simply incalculable.

Rod Sampson is marketing manager/commercial markets for Belden Electronics Division (www.belden.com), Richmond, IN.

Providers of Category 6 UTP cable

The following manufacturers offer unshielded twisted-pair (UTP) Category 6 cable. For more information, you can visit any company's Web site. For product specifications on Category 6 and other UTP cabling products, visit Cabling Installation & Maintenance's online buyer's guide through our home page, www.cable-install.com