| The New Computer Purchase Process |
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TCO (Total Cost of Ownership)
Enter the concept of TCO or Total Cost of Ownership. This is a concept that may companies are very familiar with. The basic concept is that the costs associated with the purchase of a computer for example do not end with the acquiring of the hardware itself. Additional costs include the overhead of IT for the computer maintenance, software licensing, hardware replacement, and downtime. Pay attention to the last term "downtime" as we will go into it with more detail later. TCO assumes that there are several areas in which the ownership of a computer will add up over time. One area many people and companies overlook is their electric bill. Some computers require more energy to run than other do, servers for example usually require more electricity and are on 24x7. As people and compaies become more aware of this particular cost the development of high efficiency power supplies and processors have been developed to lower the use and thus cost associated with powering computers.
Lets go back to the concept of downtime. We are all familiar with component and especially software problems that cause downtime, but how about downtime due to slow computer performance? As a company or home owner you saved $40 when you selected the slower cheaper processor for your system and now you wait what sometimes feels like forever to open applications or simply browse the internet. Yet when you go to purchase a new computer you still want to save money and are likely to select the slower processor or component due to price. Why is this? The answer is gratification, as in we are a country consumed with the desire for immediate gratification. Even large corporations who should realize the effect that choices based on this need will have on their organization pursue this immediate need for savings at the cost of longer term benefits. Don't buy in to TCO yet? Need an example of how TCO can cost thousands or more?
Lets take a small company for example:
New Age Homes is a small home builder in Anywhereville USA. They have a small office in which 25 people work in records, accounting, administration, billing, and construction management. Lets assume there are 25 PC's in this office and that the administration has traditionally been very cost concious with their purchases and opted for the following configuration for their new PC's.
- 15" monitors for all staff.
- Intel Pentium D 2.8 Processors
- 512MB Ram
- 60GB 7200rpm IDE Hard Drives
- Integrated Video
- Integrated Audio
- CDRW Optical Drive
This would actually be a pretty high grade PC for most businesses, but it will eventually cause problems. Here is what we see as potential issues:
- Small monitor causes issues with viewing and is not optimal for administrative and secretarial needs. 17" allows larger view and thus enables more work to be accomplished in less time due to less scrolling and window swapping.
- Pentium D while a good processor uses more electricity than an X2 or Core 2 Duo processor which is more powerful at a lower frequency, thus allowing for more work to be done and less time waiting for the processor to complete tasks. Additionally it should be noted that AMD processors cost less and generally run cooler and more efficiently than their Intel counterparts. This has an important impact to your power bill and electricity consumption.
- 512MB of ram while adequate for most tasks will still be 10-15% slower than a system equipped with 1GB ( 1024) which is usually a cheap upgrade.
- 60GB of hard drive space is usually adequate for most traditional office roles but IDE is not as fast as SATA drives which can transmit and record data at a faster rate.
- Integrated video will not allow for most 3D applications to be run including running the new Microsoft Windows Vista optimally, additionally integrated video will take away system ram and system processor time further slowing your system and reducing the ammount of work that can be done. Generally speaking Intel integrated video has been the least powerful integrated video option available. With the availability of Windows Vista consumers should really be looking for discreet video by ATI or Nvidia as a minimum. We have to note here as well that ATI driver support for Vista has been excellent during times when Nvidia lacked support. Ongoing software support can make a big difference in the long term ownership of your PC.
Now how does all this impact the cost to an organization? Easy lets work it out in real numbers. For arguments sake lets assume the average secretary makes $20 an hour. This same secretary spends an average of 30 minutes during an 8 hour work day waiting for various applications and documents to load. As an organization you have just spent $10 for that person to do nothing but wait. Now multiply this by 25 workers and you have spent $250 for that single day which is just wasted time. And thats just one day. Continue to multiply and do the math and you will see very quickly why selecting the cheapest system or components might not be the best choice.
Im just a home user not a business your saying. TCO still applies. You or someone else may not be paying you a wage for using your computer but you will be paying for your selection in lost time. It is now up to you to decide if the saved $200 in system cost is worth the hours and days of lost time over the next 5 years in which the average user keeps a laptop. Over time every system slows down due to user use and loading of applications and files. This slowness can be exaggerated by poor component selection. Once again you must weigh the selection of system and components so you arrive at a choice that you can live with.
Once you have made your selection we will move on to value.
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