I.T. Times

Volume 6, No 2 Information Technology News of the University of California, Davis October 1997

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    Are you familiar with the term "Total Cost of Ownership" or TCO? If the term isn't familiar, the concept probably is. A car that you bought for $15,000, for example, might cost you $10,000 in additional expenses over the period of your ownership. The same concept applies to computers: The cost of the PC you buy, plus all the associated expenses (replacement of failed hardware, end user support and training, computer downtime) generated over the course of the computer's life all contribute to TCO.

According to the Gartner Group, a Windows 95 machine with an initial hardware/software investment of $6,000 has a Total Cost of Ownership of $35,000 over three years.

Several companies are addressing the issue. Microsoft's Zero Administration Kit for Windows NT aims to reduce the time an administrator needs to spend with each machine. With network computers by companies such as Sun, Neoware, and WYSE, applications and files can be stored on a server, downloads of new applications and operating systems can be standardized, and machines can be reset to their original configurations in seconds.

You can also reduce TCO within your department in other ways. Interpose Inc. has developed a TCO model based on three factors: people (skills, training, and motivation), processes (best practices and policies), and technology (products and architectures). TCO can be reduced at each level by implementing appropriate end-user and support staff training, setting up a help desk, streamlining purchasing methods, creating team-oriented planning methodologies, or standar-dizing desktop configurations. Up-front investments in the right systems, virus protection, backups, disaster contingency plans, and fault tolerant systems can also reduce technology-related costs.

Stay tuned for future CAIT presentations on network computers and TCO. Subscribe to it-cait@ucdavis.edu to receive e-mail notifications on these and other CAIT events.