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LinuxToday.com.au: Total Cost of Ownership (TCO)

Dec 05, 2000, 17:40 (2 Talkback[s])
(Other stories by Bill Bennett)

"Can business users really justify Linux on economic grounds? Microsoft has an amazing public web page arguing that Linux simply doesn't stack up against Windows NT, now called Windows 2000. Although the page is now more than two year's old, this still appears to be Redmond's main intellectual ammunition to counter the Linux competition in the server space."

"Amongst the arguments wheeled out to support Microsoft's case is something known as the Total Cost of Ownership or TCO. As the name suggests, TCO identifies the true, underlying cost of owning and operating a server. This includes both budgeted costs and 'hidden' costs. Hidden costs can be viewed as subsidies. Not surprisingly (after all they are hidden) these cost are often overlooked. For example, a hidden cost might be staff training, which doesn't always fall under IT budgets. And there are the costs of business lost during a particularly disruptive change over."

"Microsoft's comparison found that overall costs were US$1.25 million for the Microsoft/Compaq option and US$2.14 million for the Sun alternative. But, and it is a very big but indeed, the analysis puts the initial systems price at US$367K for the Microsoft system and US$791K for the Sun system. If we substitute Linux for Solaris and swap SPARC for Compaq hardware, then factor in the steep Windows NT price rises that have taken place since 1998 this initial system price comparison would now overwhelmingly favour a Linux set up."

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