Brain Murmurs

The most current TCO data I have yet found (mentioned in my earlier TCO post) comes from Intel, in a collaborative study by its IT and Finance groups. This study would be a good place to start any consideration of TCO, though one should bear some things in mind about their results.

First, it (over-?) simplifies the TCO calculation by sticking to “hard operational costs” and avoiding “soft costs” like acquisitions planning and downtime for folks who stop doing their own work to assist their peers.

Second, this study presents Intel’s numbers, but Intel has advantages that may skew the numbers’ relevance to your organization.

Third, Intel’s method for calculating TCO involved separately compiling the costs of ownership for computers by how often they were replaced (from yearly to once every five years) and averaging the cost of ownership over the number of years between acquisition and disposal. They took this route to figure out if there was an optimal length of time to hold machines between replacements.

They found that computers held for one year cost $1,011; (and, obviously, $1,011 per year) those held two years cost $1706, or $853 per year; if held for three years, TCO was $2388, or $796 per year; if four years, $3236, or $809 per year; and if held for five years, $4280, or $856 per year.

                                                                                        –don

Filed under: JIVA by don