Business in Vancouver: News that works for you

    That $3,000 computer you bought for your office will cost you many times more than that

    by Alan Zisman (c) 1996 First published in Business in Vancouver ,  Issue #367 November 5, 1996   High Tech Office  column

    So you've filled your office with computers at an average cost of $3,000 each. But how much do they really cost? Well, to get any use at all out of them, you need to purchase software. (Yes, Virginia, software does cost money.) And you need to train staff to work with the new hardware and software. And you need to buy printers and modems and cables.

    What about a network? And a consultant to set up the network? Or other peripherals? Do you need a consultant to create or customize applications for your bookkeeping and payroll or sales or inventory control?

    Then, after it's all up and running, your staff has hardware or software questions. Who deals with them? Did you purchase a support plan? Do you have staff on-site?

    Over the typical five-year working life of a PC, an average company ends up paying a total of around $55,000, according to a study by the U.S.-based Gartner Group, and that's for the companies described as putting little investment into their computers.

    Mississauga's Compass Action Analysis, however, suggests that companies can take steps to lower these costs. It claims, after examining 94 of its clients, that those companies which actively manage their computing environment can effectively control the cost of owning and operating their computers.

    It says the costs for these "best-performing companies" have declined by nine per cent per year. These companies control the rate of software change, planning and testing to avoid making unnecessary changes. As well, they have spent more on internal support for their staff.

    Along with providing more help, they've spent time to clarify the end user's role in maintenance and tech support. Should users install their own software? Hardware? How far should they go to support each other?

    As a result, in the companies which have been able to reduce the cost of computing, the amount of time spent by employees on computer-support-related issues has dropped from 72 minutes per week to 41 minutes per week. More active use of support staff frees up users to spend more time working on their real jobs. Finally, the best-performing companies make the most effective use of their hardware, especially their network, to save costs by optimizing resources.

    Saving money doesn't come cheaply, however. Gartner vice-president Bill Karwin suggests that rationalizing computer and software strategies and setting up internal support systems costs money up-front, although such actions clearly save companies money in the long run. Companies can end up saving up to 25 per cent of their computing costs, but not by simply reducing funding: dealing with budget problems that way only puts off problems.

    Reducing the ongoing costs of computing is the rationale behind the so-called Network Computer (NC) initiative. First suggested by database-software giant Oracle as a $700 Internet computer that home users could hook up to the family TV, the NC has been gathering interest in business circles as a potential replacement for the estimated 35 million business "green screens"--the hordes of old, monochrome, dumb terminals connected to corporate mainframes.

    IBM, for one, is hoping such a machine will help it regain its former dominance. It has recently released its version of the NC, hoping to duplicate the 70-per-cent market share it held in the early days of the PC a decade or so ago.

    IBM's NC isn't the first to be released, but it is one of the first from a major manufacturer. Priced at about $1,000, it features a PowerPC processor and 8 megs of RAM (expandable to 64 megs). With no hard drive, it's designed to be used on a company's network or on the Internet. Applications would be downloaded from the server, and setup and support will be server-controlled.

    About the size of a pack of typing paper, and weighing just under a kilo, IBM's Network Station doesn't include a monitor. (And don't connect it to your leftover green-screen terminal!) At $1,000 plus the cost of a monitor, critics suggest the NC isn't cheap enough: you can buy a more fully functional PC for not much more (and then have to deal with endless support costs, counter NC fans).

    But don't count the PC out just yet. Recognizing concerns about the high costs for businesses in owning and supporting PCs, Microsoft is pushing what it calls the Simply Interactive PC, suggesting that an easier-to-use and cheaper PC could be available as early as 1997, providing all the Internet and network capabilities of a modest NC along with the power and flexibility of a personal computer.

    Microsoft, IBM, and others are battling about how to save businesses money. This fight may be worth watching!

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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan