Some years ago the UK boss of printer company Kyocera posed for a publicity shot brandishing a sheaf of burning #50 notes. The stunt was designed to draw attention to the money wasted by users who failed to take account of the cost of owning a printer.
Kyocera is not alone in latching on to the issue of hidden expense. Cost of ownership has become a hot topic for marketing departments across the industry. Compaq recently launched an advertising campaign focusing on the cost of ownership. It reminds IT buyers that 80 per cent of a PC?s lifetime cost relates to hidden expenses, such as maintenance and support.
Similarly, Fujitsu is promoting its product on low ownership costs, with the headline: ?Penny wise, pound foolish?? Other PC manufacturers are devising modular motherboards that reduce upgrade costs, while Microsoft, NEC, Intel and Digital are lowering running expenses by making their desktop systems more manageable.
There is also the whole Network Computer (NC) debate. Last month, research firm Gartner Group weighed in with projected cost savings of up to 41 per cent a year for NCs, compared to conventional Windows 95 machines.
Gartner has identified three types of Network Computer: a server-centric machine offering savings of 33 per cent a year; a client-centric machine with reductions of 41 per cent; and the NetPC, the model devised by Microsoft and Intel which will provide estimated annual savings of 26 per cent when it is launched in the middle of next year.
So, how much will IT managers save by opting for a system that offers lower running costs? That?s a difficult question. For a start, there are huge variations in estimates of the average annual cost of owning a PC.
Economist readers are told the average cost is #4,000 a year. Fortune magazine would have us believe it is closer to #5,600. Business Week reckons the figure is much the same, while The New York Times goes for broke with #8,125.
These conflicting figures are confusing. Even more so because IT departments must also add in the cost of scrapping or changing their existing systems before switching to NCs or low-maintenance PCs.
The cost of that migration could be the equivalent of a year?s development-and-maintenance budget, according to American IT management guru Paul Strassman. He says these estimates are a meaningless abstraction because they ignore the two crucial factors in cost of ownership: how people work with their PCs and how the PCs are managed.
PCs used in clerical applications where the range of activities is limited will clearly not cost as much to support as those operated by professional users who will not only demand more resources but may have more problems with their system.
IT departments in companies with a high staff turnover will spend more time training, using passwords and dealing with queries from new users than businesses with a more settled workforce.
A user who adopts a standard architecture will find life easier than one with a plethora of different operating systems and applications software to contend with. Without central configuration controls over software and hardware, one can easily double the number of helpdesk staff. Similarly, easy access by end users to Internet facilities can push communications and support costs sky high.
What is clear from all this is that, when it comes to the hard question of cutting the cost of ownership, statistics about average costs and average cost savings are just so much smoke and mirrors. Cutting costs can only be achieved by paying close attention to a wide variety of driving factors. If you get those right, you may not need to worry about the Network Computer after all.
John Lamb is contributing editor of Business Computer World.
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