Proper planning and management best practices can help lower deployment, maintenance, support and energy costs.
Gartner Group is often credited with coining the term “total cost of ownership,” or TCO, in the late 1980s, a concept that quickly became popular throughout the analyst community. However, some experts say the term is at least 80 years old, dating back to the late 1920s. And like any enduring idea it is simple to state but difficult to put to into practice.
When applied to IT, TCO is typically defined as the sum of the acquisition, implementation, management, support and use costs of technology. It acknowledges that purchase price is only one component, and often a very small component, of the cost of a device throughout its lifecycle. Most business owners and IT managers are aware of this fact, but identifying all of the cost components associated with a particular device can be tricky. Measuring them can be trickier still. And finding ways to reduce TCO — which is, after all, the purpose of the exercise — often remains elusive.
However, a number of studies have identified best practices that can lead to dramatic reductions in TCO while improving productivity and reducing risk. The key, experts say, is proper planning, deployment and management aimed at delivering maximum functionality at minimum cost.
Setting the Standard
Gartner’s original TCO analysis was designed to calculate how much the typical PC cost the typical enterprise. When the analyst firm came up with an initial value between $7,000 and $13,000 per user, IT and finance departments gasped.
Yes, PCs cost more in those days than they do today, but what really adds up are the recurring expenses for staff, infrastructure and maintenance. PCs have to be installed and configured, and end-users have to be trained. There are software licenses, maintenance contracts and other add-ons. Support has to be provided, either formally through the IT department or informally when users attempted to solve problems on their own. And then there is the cost of managing the network to which the PC is connected.
Streamlining the PC infrastructure is the key to keeping these costs in check. Organizations should limit the number of PC models, operating systems and configurations by regularly refreshing desktop hardware and utilizing a standardized “gold image” to install applications based upon the end-user’s profile. This will simplify desktop rollouts, reduce support headaches and ensure that software licenses are purchased only as needed. If appropriate, software distribution can be automated.
Trimming the Fat
An increasingly popular option is to utilize desktop virtualization to effectively centralize desktops in the data center. Desktop virtualization solutions transform the entire desktop — including operating system, applications and data — into an image that is stored and executed on a server. A virtual desktop functions as though it were running directly on the user’s computer, but critical data is kept in the data center where it can be more easily managed and secured.
End-users can access their virtual desktops using thin or “zero” clients as well as traditional PCs. Thin and zero clients cost less and consume less power than traditional PCs and are easier to support. Even if end-users require full-featured “fat” clients, organizations should retire old equipment in order to take advantage of newer, more energy-efficient PCs with built-in power management features.
Power and cooling costs have become an increasingly large part of the IT budget, and experts say organizations waste a tremendous amount of power by failing to implement simple power management strategies such as turning off idle or unused equipment. According to analyst firm Aberdeen Group, organizations that take steps to reduce their “carbon footprint” can achieve a 6 percent reduction in energy costs, 7 percent reduction in facilities costs and 10 percent reduction in paper, all while managing to improve customer retention by 16 percent.
Automate and Outsource
Many newer PCs also include standards-based system and configuration management features and monitoring and reporting tools Remote wakeup and shutdown features allow IT managers to automatically distribute software updates overnight. The system will wake up when the update is launched and shut down when it is completed for energy savings.
Network management tools can also aid in lowering TCO by reducing time spent on administrative and troubleshooting tasks. However, many smaller organizations don’t have the budget to deploy advanced network management tools, or the in-house expertise to take full advantage of them. Managed services plans, in which a third-party provider takes over the monitoring and maintenance of network assets, can be a very cost-effective and attractive solution.
TCO analysis is not a panacea. Experts have defined numerous cost metrics, and it can be difficult to determine what should be allocated to a particular asset. There is cost and effort associated with performing the TCO analysis itself. Nonetheless, it makes sense to consider all of the cost associated with an asset and take steps to minimize those costs insofar as possible.
