Enterprise Client Total Cost of Ownership (TCO)

Enterprise Client Total Cost of Ownership (TCO)

The following was authored by John Pate, End User Computing

Dell Enterprise Clients and Total Cost of Ownership (TCO)

IT today is being asked to do more with the same or even shrinking budget. The key to remaining successful is to use resources as effectively as possible. In many cases, savings are being sought by extending PC refresh cycles as long as possible. After all, it is easy to determine the acquisition cost of replacing a workgroup’s or full enterprise’s computers, and it is tempting to look at this cost as something easily pushed off until later. However, holding on to out of date equipment has its own costs and can be the more expensive in the long run. If extended too long, IT will find itself spending all your time fixing out-of-date systems. That’s why understanding the Total Cost of Ownership (TCO) for your environment is critical in determining the right time to replace your systems.

Factors that Impact TCO

TCO varies widely for different customers depending on key factors in each company’s environment. To help you determine your TCO, Dell has created a comprehensive Client ROI Analyst Tool that will help you determine the best time to replace your systems. By understanding the factors that make up your TCO, you should be armed with the information you need to make the most prudent business decisions for your environment. So, let’s review some of the major factors that impact TCO.

Performance– Computer performance of new systems continues to increase as Moore’s Law holds true. At the same time, prices of PCs historically decline. Thus, the price/performance of PCs can rise dramatically over a few years time. These faster systems can significantly improve productivity of personnel and improve the morale of end users who are struggling with systems that are near obsolescence. The impact of introducing new systems will vary greatly depending on the applications running and the salaries of the personnel using the systems.

IT labor costs– The more often a technician has to touch older systems, the more compelling the case to conduct a refresh. Keep in mind, leading industry analyst research shows that the cost of acquisition of a PC no longer represents the largest portion of TCO. Many costs are hidden or folded into fixed expenditures such as salaries, so the better the customer knows their environment, costs, and repair rates, the better the information to make a wise decision. Since Dell has a direct relationship with our customers, your Account Executive can provide data that will assist you in determining your repair rates.

Security– Security continues to be a key concern for companies, especially for their portables. New security features such as support for fingerprint readers, smart cards, biometrics offered on today’s corporate systems far exceeds what is available on older systems. Furthermore, notebooks and desktops that are on their last legs just aren’t going to have sufficient performance to allow them to run software based encryption that using the CPU for encryption and decryption of files on the system. Finally, while loss of hardware can be significant, that burden can easily be dwarfed by the costs involved in recovering lost proprietary or confidential data. XX estimates that that the cost of lost data can be as much as XX per lost record. Obviously, security has to be a top priority for every enterprise today.

Imaging & update difficulty– Older systems can become difficult to update as drivers stop being developed for discontinued systems. Very few of systems qualified for “retirement” will be able to run today’s newest operating systems such as Windows 7. And, even if you are not going to update their OS, maintaining and supporting a mixed operating systems on clients will increase support costs. Finally, the higher the number of PC generations in an environment, the more complex it becomes to image, update, and maintain their client systems.

Warranty– As systems are no longer under warranty; the cost of repairs can rise dramatically. Obtaining parts will become increasingly difficult.

Power Usage– As energy costs rise and consumers demand that companies are “green,” power usage of client systems becomes a larger concern. Today’s notebooks and desktops are much more efficient than those produced just a few years ago. Better power management, lower power CPUs, and other key components provide significant power saving without requiring a loss of performance. Dell’s “Green by Design” approach considers the environment in all aspects of the product lifecycle, from design and engineering to packaging and recycling. The Dell Client Energy Calculator is also helpful in determining the power savings of replacing older systems. One other thing to check if you are deploying new client or datacenter equipment is whether your local utility company offers rebates for replacing legacy systems with energy efficient products.

Dell TCO Site

Dell can help you take control of your IT infrastructure and better understand your TCO. With Dell's Client ROI Analyst Tool you can compare the ROI business case for standardizing on Dell LatitudeTM notebooks, OptiPlexTM desktops, Dell PrecisionTM workstations and services with a full deployment today, or a staged rollout over the next three years. Similarly, the Dell Client ROI Analyst Tool allows you to calculate the cost for deployment and quantify the benefits from Dell standardization.Dell designed its ROI tool to help you evaluate the impact of standardization on your organization. You work with your Dell Account Manager to enter information about your organization, create multiple scenarios, assess risks, and develop a comprehensive analysis. The resulting business case is your document to use within your organization to evaluate and evangelize the estimated benefits of client product standardization.By working directly with our customers, Dell learned that understanding both the cost of the solution and the estimated benefit it may deliver to the organization is an important part of our customers’ decision making process.

Other Thoughts about TCO

Dell/Intel strategies for reducing TCO of desktops. http://www.dell.com/downloads/global/products/optix/301874-001US.PDF Intel understands that TCO is a major consideration for corporate buyer and has spent considerable resources on key technologies such vPro, power management, stability, and complexity reduction to lower corporate TCO.


http://www.intel.com/technology/manage/iamt/docs/intelus_wiprowhitepaperfinal82906.pdf
http://download.intel.com/it/pdf/Using_TCO_to_Determine_PC_Upgrade_Cycles.pdf

Intel White Paper: Using TCO to Determine PC Upgrade Cycles.
http://download.intel.com/it/pdf/Using_TCO_to_Determine_PC_Upgrade_Cycles.pdf