LinuxToday.com.au: Total Cost of Ownership (TCO)
Dec 05, 2000, 17:40 (2 Talkback[s])
(Other stories by Bill Bennett)
Re-Imagining Linux Platforms to Meet the Needs of Cloud Service Providers
"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."