Databus Issue: 2003 3 07/15/2003
Reducing Your Total Cost of IT Ownership Through Appropriate Use of Personal Computer Technology
Jeff McFarlane President
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When educational institutions design and implement personal computer technology, they often design with a target lifecycle of five to seven years of use before planning the next technology refresh. During this lifecycle, the technology utilized will gradually shift from state-of-the-art to adequate to obsolete. However, the computer hardware can be appropriately matched to the demands of the software applications.
It’s no secret that computer technology depreciates very quickly. In fact, computers are often worth 50 percent of their original value after one year and 20 percent of their original value after just three years. Many progressive school districts and school boards have shifted their thinking with this steep depreciation curve in mind. By procuring technology from the Secondary Market, they have been able to significantly reduce their Total Cost of Ownership (TCO), while simultaneously improving their student to PC ratio and reducing the time between technology refreshes.
The Secondary Market is defined as a spectrum of products ranging from new, recently discontinued products, to refurbished and re-warranted products. For example, by purchasing new, discontinued products that might have been the “bleeding edge” standard nine to 12 months ago, educational institutions might save 25 percent to 40 percent as compared with the original cost, thereby avoiding the steepest segment of the depreciation curve.
Alternatively, by sourcing refurbished technology, possibly off-lease product that has been re-certified, educational institutions could save upwards of 75 percent of the original cost and total depreciation.
Therefore, instead of buying with a five to seven-year lifecycle plan, the same institution could time their purchases with this depreciation curve in mind and utilize discontinued or refurbished products to maintain a better student to PC ratio and still save a significant amount of money.
With a solid understanding of the true “cost” of technology and the associated depreciation curve, matching your hardware requirements with appropriate technology will certainly assist you in managing your TCO in, what for many is, a difficult budget environment.
Jeff McFarlane is the president and founder of I.T. Xchange and has been involved in the resale and leasing of computer technology for over 15 years.
For more information about Secondary Market personal computer products, visit www.itxchange.com, email Charles Richards at crichards@itxchange.com or call toll-free (877) 377-5227 x 233.
