Monday, January 14, 2002

Doug's book (see previous entry) inspired me to dig up a few resources on IT costs. While TCO (total cost of ownership) has long since entered into IT jargon, most people who I've heard toss the term about with knowing looks don't appear to understand it.

There are some reasons, in my opinion, for this: (1) too many IT professionals give lip service to business issues, but are more interested in technology (there are exceptions, but they're rare), and (2) their knowlege, such as it is, comes from Microsoft, PC manufacturers or "industry analysts". Considering the spate of security and availability problems with Microsoft's products that are reported daily in industry rags and e-news, I have to surmise that the only folks in Redmond who know what TCO is are the marketing folks. PC manufacturers, on the other hand, have a better story, but that story is slanted more towards asset management - not very total in my opinion. Regarding the "industry analysts", I've not seen anything that wasn't a rehash of the 1987 GartnerGroup work that launched the TCO voodoo in the first place.

I do have a few links that attempt to explain TCO and put it into its context. One of the best is TCO Models, which is focused on the GartnerGroup approach.

Gentronics has some interesting slants on TCO in a marketing blurb about building e-infrastructure. Their value proposition is based on Total Value of Ownership, which is based on information advantage. Try measuring or quantifying that. They tell a compelling story, it makes sense at an intuitative level, and I can see why one would go charging off to buy into it. However, if you ask a few basic questions, such as, how can I quantify the factors? you'll see that this stuff is pure marketing hype.

I have to admit that Compaq's materials (from desktop and infrastructure points of view) are sensible and take a straightforward approach. If your TCO focus in either desktop or infrastructure (or both), the TCO PowerPoint Presentation and TCO whitepaper (in MS Word format) are valuable.

Just bear in mind that the costs of ownership are not total if you're not looking at the total picture. I do have better resources on my old Infrastructure, Life Cycle and Project Management page that will help you get to the big picture. Look in the Tools & Documents section.

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