If, reading the newspaper advertisements, you think personal computers cost between £1,500 and £2,000 each, think again. Businesses agree that the purchase price is only a fraction of the total cost of running a PC, but there is little agreement on just how much.
However, help is at hand. Driven by the demand for cheaper computing, the industry is now coming up with figures to help information technology (IT) managers who are considering new technologies.
According to Mr Leo Ring, organisation customer unit manager in Microsoft Ireland, Microsoft uses Connecticut-based Gartner Group's reports when estimating the cost of a PC. Gartner Group's Total Cost of Ownership, or TCO, is one of a number of such tools, including Real Cost of Ownership from the Meta Group, and Economic Value Add from the Giga Information Group.
These tools attach varying significance to different costs, such as the cost of support from work colleagues, for example, but the Gartner Group estimates the TCO of a PC to be between $7,000 (£4,650) per year (Window 95 or NT) and $13,500 per year, depending on work practices.
Mr Ring says machines have a three-year lifetime, and estimates the capital costs - the cost of buying the hardware and software - account for less than 20 per cent of the total cost of a PC over this lifetime. "Eighty per cent of the costs are not related to the hardware or software," he says.
"That's made up of things like training costs, support costs, administration costs and end-user productivity costs." Thus, he says, a typical $2,000 machine costs $10,000 over three years, or $3,300 a year, considerably less than the TCO estimate.
The TCO model breaks costs into four areas: capital costs, administrative costs, technical support and end-user operations. Mr Ring says administrative and support costs can be reduced by limiting users' abilities to alter desktops, which a feature called Zero Administration will facilitate.
Mr Bryan Alton, technical director of Euristix, a Dun Laoghaire-based software company providing telecommunications products and services, says the cost of support is "the greatest part" in the total cost of owning a PC. Mr Alton has found the ratio of PCs to systems administrators is 40:1 for computers used by administration staff, and up to 60 to one for engineers' PCs. But he says laptops cost more.
Mr Alton says he has found it cheaper to keep spare PCs in stock rather than to pay for support agreements. He says support contracts typically cost 15 per cent of the price of a machine, and with around 100 machines, worth £2,300 each, that would mean a bill of £30,000 to £40,000 a year.
Many companies use maintenance companies for their support. Mr Joe O'Reilly, sales and marketing director of one maintenance company, Workstations Computer Group, says a typical cost would be £70 per PC, although most of the company's business is "extraordinary support", costing more. This includes after-hours work, critical server maintenance, and guaranteed fixtime work.
Another company, Moss Technology, offers four-hour response time for call outs, with spare machines if necessary, as well as support for standard, non-mission critical software over the phone. Its director, Mr Martin Ryan, says the cost of a maintenance contract for an average PC is £100 to £150 a year, although there are reductions for larger sites.
Mr Ryan is sceptical of TCO analysis, dismissing it as yet another industry buzzword. He is not alone. TCO's critics say it involves lots of guesswork and assumptions to arrive at suspiciously precise figures, and it doesn't take into account the profits your computers are generating. Even more importantly, it does not tell you the incremental cost of purchasing another PC.
