Thin Is In

The Value Proposition

If your computing investment constitutes a fairly large share of your capital assets and is probably the first to depreciate, you can't afford to pass up the newest business opportunities and productivity gains from computing and on the Internet. But productivity gains can disappear in the face of repeated upgrades of increasingly inefficient software that quickly obsoletes ever-more-powerful hardware.

Your PC's price tag is just the down payment on your computing bill--known as TCO. You pay it off with productivity lost in 15-minute to one-hour increments while you inventory, upgrade and trouble-shoot equipment, and train employees to use it.

GartnerGroup, which has been doing TCO studies for more than a decade, figures the cost of maintaining a Windows desktop is around $10,000 per year. It's paid in time--in lost productivity--rather than cash.

Actually, a large portion of PC support costs are caused by adding software which causes conflicts or disables other software on the system, according to GartnerGroup's Michael Silver. Its latest study predicts it will take three to five years of productivity gains to recoup the $1,500 to $3,000 it will cost to upgrade the average desktop PC to Microsoft's new Windows 2000. At best, you'll have paid off Windows 2000 just in time to upgrade to Windows 2003. Another way to think of it: If you're lucky, the return on your Windows 2000 investment will be zero. "Welcome to the upgrade treadmill," says Silver.

Gartner Group figures you can trim 20 to 35 percent of your costs with a managed client/server environment using thin clients, where you control the applications used by employees and only have to upgrade the server. Some corporate IT managers, who have been pulling their hair out over computer maintenance costs for years, report even better returns than that.

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: Thin Is In.

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