Why Are Network Switches So Expensive? (10 Reasons)

 

Ethernet cables can be a great way to improve your internet connection, but you may have too many devices that require an Ethernet cable.

Network switches can be a useful way to connect several devices to the internet via different Ethernet cables.

However, several factors can make buying network switches expensive.

 

Why Are Network Switches So Expensive? (10 Reasons)

 

While some network switches cost around $300, others can cost over $5,000.

Network switches are expensive due to the high costs of manufacturing different features that they offer, the brand it comes from, the fact that it’s a niche product that not everyone needs, and research and development costs to innovate the product further.

Let’s look at these factors in more detail.

 

1. Number Of Ports

 

You might be wondering exactly what the function of a network switch is.

A network switch basically allows a user to plug several different devices at once with different Ethernet cables into a device that distributes the internet to those connected devices.

Everyone knows that an Ethernet cable tends to provide a stabler internet connection than WIFI.

The problem with most routers is that they typically only have one or two ports for Ethernet cables.

As such, you can only plug one device in at a time.

Network switches bypass that by offering several ports.

You can plug in your PC, gaming console, and other internet-connected devices to the switch with Ethernet cables.

This ensures that each device has a strong internet connection.

The problem with network switches is that those extra ports cost more to manufacture.

The more ports that a switch has, the more costly it is to make.

Since the cost of manufacturing is higher, the company has to sell the product at a higher price to offset those costs.

Network switches are expensive because of the cost of producing a device with multiple ports.

 

2. Ability To Support High Internet Speeds

 

A network switch that slows the internet down isn’t going to be a big hit with customers.

The switch’s primary purpose is to make connected devices run faster.

In order for a switch to do that, it needs to use high-quality materials.

It has to be able to take the fast rate of data transmission from the router, then feed that to the connected devices.

Some routers are more powerful than others.

Routers that handle 1,000 GB internet speeds, for example, are going to need a different type of switch from one that handles only a few GBs of internet speeds.

The network switch has to be able to facilitate high internet speeds.

Since it costs the company more money to make a switch capable of processing and transmitting fast data, it’s going to need to put the product at a higher price.

There’s also some perceived value with switches that can handle or even boost internet speed.

Some customers are going to be willing to pay more money for a switch that produces faster internet.

That also allows the company to put the price at an expensive level.

Network switches are expensive because it costs more money to make one that can handle high internet speeds.

 

3. Layer 2 And Layer 3 Functionality

 

Here’s the deal with network switches.

Companies know that the everyday consumer doesn’t stay on top of the latest news on technology development.

As such, the company can get away with marketing its network switch as having Layer 2 or Layer 3 OSI layers.

To the average consumer, that information means nothing.

It sounds good though.

To someone with a bit more understanding of how networks and data transmission work, knowing that a network switch has both Layer 2 and Layer 3 OSI layers can be very beneficial in the right environment.

To the uninitiated, buying a Layer 2 and Layer 3 network switch may seem like a good choice since it covers two different transmission methods.

However, those are also the switches that tend to cost the money.

In reality, the individual likely can get away with just a Layer 2 network switch and have their needs met.

Others might find a Layer 3 switch to satisfy their needs.

The Layer 2 OSI layer can handle data transmission with MAC addresses.

The Layer 3 OSI layer can handle data transmission between IP addresses.

A network switch that is capable of both Layer 2 and Layer 3 data transmissions is a bit more expensive to make.

It requires more engineering and parts.

As such, the price for a Layer 2 and Layer 3 network switch is going to be higher.

Network switches are expensive because offering Layer 2 and Layer 3 data transmission is more expensive.

 

4. High-Quality Parts For Premium Performance

 

There’s a lot of engineering that goes into a network switch.

One of the most important parts is the chip.

The chip is basically the brain of the switch.

It tells the switch what to do at any given point.

The more advanced the chip is, the better the performance is.

A cheap chip, for example, may not be able to handle inputted information as quickly as an advanced cheap.

As a result, the user might experience internet slowdowns or poor performance.

Chips aren’t the only important part of a network switch either.

It also uses RAM for short-term memory.

RAM is important in a network switch because the switch has to remember IP addresses and MAC addresses.

If the RAM isn’t that well-made, then it might struggle to remember certain things.

This makes the network switch work harder which could also result in poor performance.

A more expensive RAM card can make the switch work faster and more efficiently.

However, advanced chips and RAMs are more expensive to manufacture.

Since the cost of manufacturing is higher, the price of the switch is also higher.

Network switches are expensive because of the cost of producing high-quality chips and RAMs.

 

5. Added Security Features

 

Here’s the deal with the internet.

It’s a dangerous place.

At any given time, hackers, bots, and other nefarious entities are trying to attack your computer.

Each of those entities is essentially trying to gain access to your sensitive data.

There’s nothing so valuable as your data.

Hackers can sell it to corporations who can use it for marketing analysis.

More nefarious entities can sell it to people who need the information to take out a credit card or even just to gain access to your existing credit cards.

Regardless, the internet isn’t always a safe place.

As such, some network switch manufacturers also add security features.

The company might add a firewall or other anti-virus software to keep your data safe.

If it notices something odd, then it can stop the probe before it reaches your device.

Adding safety features to the switch costs a bit more money.

For one, the company needs to hire a security expert to write the software for the switch.

It might also need to purchase certain types of software.

Since the cost of manufacturing the product is higher, the price is going to be higher, too.

There’s also the perceived value.

Consumers may find a switch that also has safety features enabled on it to be more valuable.

They’re willing to pay more for that added security.

Network switches are expensive because added security features make them more expensive to produce.

 

6. Added Fans Or Power Supplies For Improved Performance

 

A problem that electronics often have is overheating.

The more that they run, or the harder that they run, the hotter they become.

When electronics become too hot, problems can start to occur.

The device’s parts might even start to melt over time.

To avoid overheating, manufacturers install fans.

The fans help push the hot air either out of the device or toward a heatsink.

Some network switches have more fans than others.

Manufacturers who want to ensure high-quality performance and durability tend to put more fans in the switches.

The more fans that a switch has, the easier it is to cool down.

Since it’s cool, it’s able to perform better.

The problem with having numerous fans, however, is that it’s more expensive.

The manufacturer has to make the additional fans, for one.

It also needs to look at its power supply.

Having more fans requires more power to run them.

The company might have to upgrade its power supply to support the fans.

That might also mean more expensive parts.

The result is a network switch that has an easier time staying cool.

Network switches are expensive because of the cost of adding more fans.

 

7. Remote Management Capabilities

 

While most people will use network switches to provide a strong internet connection to different devices, others might need them for more professional means.

As such, some network switches come with remote management capabilities.

For example, some switches come with software that allows you to view the connected devices to the switch.

From there, you can control whether to stop data transmission to and from the device or not.

Let’s say you have two computers connected to a switch.

If you’re only using one, then you might choose to tell the switch to stop delivering data to the other computer.

Some switches allow you to do that.

All attention can then go to the connected computer that you do want to use.

It might improve speed or performance as a result.

This added feature isn’t something every network switch provides.

As such, it costs a bit more to have this feature.

Network switches are expensive because some of them offer remote management capabilities.

 

8. Brand Name

 

The brand name also plays a factor in how expensive the switch becomes.

Brand names that are well-known for producing high-quality products tend to be more expensive than generic brands.

That’s because they put in a lot of work building trust.

They’ve been around long enough to make themselves an authority in the industry.

Since they set the standards, they’re also able to set the prices.

Buying a network switch from a well-known brand name is going to usually result in a higher price.

 

9. Niche Product

 

Network switches are also relatively niche.

Not every person who has a router is going to need a network switch.

Most people can just use WIFI to connect to other devices.

Only those who require the very best internet performance tend to bother with network switches at home.

Network switches are a bit more important in certain professions.

As a result, network switch companies know that the primary audience to sell to is business owners.

Businesses tend to have higher budgets than homeowners.

As such, the price is going to be higher.

Network switches are expensive because they’re a relatively niche product which allows the company to charge higher prices.

 

10. Research And Development Costs

 

A final reason network switches are expensive is that they have high research and development costs.

The tech industry is always innovating.

As new technologies and parts are released, the need to upgrade existing products increases.

To stay ahead of competitors, a company needs to fund its research and development team well.

The team is responsible for looking at new ways to improve the product or offer new features.

To fund the research and development team, the company has to have enough revenue.

It generates that revenue through high prices.

Network switches are expensive because of the cost of funding a research and development team.