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Computing, Control and the Desktop Where the Software/Hardware/Computing Business is Heading

Originally published April 5, 2007

In the days before everyone in the working world had a computer on his or her desk, the question of which workers deserved to have a PC was a pressing one. For a good part of the early days of personal computing, managers answered that question by doing cost/benefit analysis. In other words, if you could convince your boss that having a PC on your desk would save the company money, he or she would buy you one.

In time, thankfully, executives learned that just buying everyone who worked with data a computer beat wasting time and effort on a (usually fudged by the recipient-to-be) cost/benefit analysis. Like telephones and even desks, PCs earned their status as fundamental business tools. However, there is a huge disconnect between the way businesses acquire and maintain business tools like telephones or automobiles and the way they handle personal computers that imposes a huge cost on the organization.

The difference is this: PCs are not fungible. For various reasons, we tend to impose a one-to-one link between individual employees and individual computers, and if A's computer is out of order, A can not do any meaningful work until that computer is fixed or replaced.

PCs differ significantly from telephones and other business tools in terms of their costs and the ability of management to control those costs. Phones are configured and controlled centrally; PC costs, by their nature, are much more difficult to manage centrally. Phones act like remote terminals hooked up to a mainframe, PCs act like little mainframes sitting on every employee's desk.

Each user has his or her own little mainframe, each of which has to be managed. Each system requires software, each system requires configuration, each system requires backup and each system requires administration. It's the equivalent of directly connecting a telephone on the desk of each employee with individual line billing for local and long distance services.

Consider the difference between buying and maintaining a car and buying and maintaining a PC. Dealers and manufacturers offer a finite set of features and options, configured as they deem fit, and you get to choose from those when you buy the car. Computers are available in preset configurations, but you can also choose from an almost infinite array of peripherals, display adapters, networking interfaces, input and output devices, and much more – even before you start adding in software, some of which may be provided by a third-party vendor, some of which may be designed and coded internally to the corporate consumer.

When you buy a car, you drive it off the lot and go about your business; when you buy a PC, you've only begun the process of turning it into a usable business solution. You've got to decide what software to use – in particular, what kind of application software to use. Then, there are configuration tasks to be done, and then you've got to keep up with upgrades and bug fixes.

There's almost nothing you can do to a car that will make standard maintenance on it any different: filling it with gas or changing the oil are standardized procedures that virtually anyone can do. With a PC, almost anything you do to it is liable to make standard procedures more complicated.

The results? Here are two:

  • The high cost of maintaining individual computers on virtually every worker's desk. If an employee's vehicle is out of order, that employee can just as easily use some other vehicle; if a telephone handset goes on the blink, an employee can forward his or her line to another handset with minimal fuss.
  • Employees bound to a single computer must maintain a connection with that computer to do any meaningful work. Laptops for mobile workers cost more to acquire and maintain, and add an unwelcome physical element to being “work-ready.” Telecommuting or working temporarily from off-site for any reason requires significant additional infrastructure and preparation.

Why shouldn't computing be more fungible? It would certainly make corporate life easier, as well as more profitable.

Breaking the Mold
In a word, the PC business is as it is because it benefits the vendors – particularly the vendors of software. And by “vendors of software,” I mean “Microsoft.” Buying individual licenses for every PC, even when you get site licenses, contributes to the bottom line of the vendor, not the buyer. It's easier to get a foothold in a company selling individual licenses for a few hundred dollars per license than it is selling mainframe software for tens or hundreds of thousands of dollars – no matter that the per user costs for mainframe software can be a fraction of the cost of similar application software for PCs.

But things are changing, and Microsoft is facing competition from two new directions:

  • Virtualization. Adding layers of abstraction is good, as TCP/IP networking did to allow the integration of disparate and heterogeneous individual local area networks into interoperable internets. By turning the concept of a personal computer into a “virtual desktop,” corporate IT departments can abstract out the messy individual PC support they must provide and turn it into a utility that users can use simply by plugging in from any supported PC.
  • Web-based computing. It's really the same thing as virtualization, but on a different scale. When Google offers Google Apps, an e-mail, instant messaging, calendar, word processing and spreadsheeting solution, it's really just abstracting out all the messy stuff and offering the applications as a service that you can “plug into” from any supported PC. The standard edition is free, and gives you 2GB of e-mail storage; Google Apps Premier Edition, just $50 per user/year, is the full-service version with live support, 10GB e-mail storage and more.

The two biggest differences between what I've dubbed here as “virtualization” and “web-based computing” are these:

  • Level of abstraction. Virtualization technologies currently in use require that users be running appropriate software on their PCs in order to access corporate virtualized computing resources. As virtualization becomes more widely used, the virtualization software is gaining in acceptance and becoming more widely deployed. However, it does frame the issue of who can use the virtualized resources in terms of individual computers. Web-based computing, by definition, extracts the essence of each application and reduces functionality to the least common denominator of web-based access. By reducing the interaction between data and user to functions that can be transported over web connections, users are given the ability to access all of their data and do all their work over any web interface. Users are liberated completely from any specific computer and given the freedom to work from any computer.
  • Control. Web-based computing, especially when provided as a software service by a third party such as Google, cedes control over data and access to applications to the third party. With virtualization, the organization retains control over what hardware and software is being used, and, especially, what happens to the data being processed by users.

Clearly, there are benefits to implementing a new paradigm for computing that liberates individuals from their computers and allows them the freedom of movement to access “their” desktops from any PC, not least of which is the ability to consolidate and reduce the cost of maintaining all those individual computers. However, data has come to be seen as so integral to business that companies are more loath to allow third parties to manage data than any other corporate resource – even money.

What's Really Holding Us Back?
How many corporations are even capable of maintaining their own, in-house, financial operations, let alone willing to take on the risks of doing so? It is much more sensible to delegate functions such as insurance, banking, and financing to third-party vendors. Likewise for telecommunications: there are a few very large companies that have the resources and need to deploy their own in-house communications networks, but most find it more appropriate to outsource that function.

At the same time, how many corporations are willing to put all their intellectual capital under the control of a vendor? What about when the vendor is a largely unknown quantity, say a company that has only been in business for a few years? Like Google? Or a company that has significant expertise and experience in other fields, but a reputation for playing hardball with customers and business partners? Like Microsoft?

Corporations, and individuals within corporations, may be reluctant to outsource their data processing activities to third parties – but the stakes are very high. If Google is serious about selling web computing for $50 per user, per year, then it's worthwhile to calculate just how high those stakes are.

For $50/user/year, Google offers desktop applications with a guaranteed level of service, as well as APIs to let you integrate your existing applications and systems with Google Apps. The objective is to allow end users to access all appropriate and necessary applications and data resources from any web-enabled computer. Assuming that the corporate goal is to take PCs off the Windows/Office install/upgrade/replace treadmill, we've got to assign a cost to that status quo. We could spend a great deal of time trying to evaluate what the total cost of ownership of a Windows/Office PC is, at the same time trying to allocate the base costs of maintaining any computer at all (to run Google Apps).

Or, we can save a lot of time and estimate the cost of maintaining a Windows/Office PC at approximately $600 per year. That would cover costs such as software upgrades for applications and operating systems, as well as the cost of upgrading the hardware periodically (and before the hardware actually stops working), training, system administration, support, and so on. While a case can easily be made that $600/user/year is on the low end, it's equally easy to argue that $600/user/year is clearly not too high to be an unreasonable estimate.

Assume 100 million PC users in the U.S. work force, and carry a few zeros, to come up with a potential savings of $55 billion per year if all those workers were to switch to Google Apps. Minimum. Cutting $550/year per employee nets a 100 person outfit more than half a million, per year, with zero or almost zero cost to deploy. If TCO is higher, then the net addition to the bottom line is that much higher as well.

Considering that the body of research into total cost of ownership accumulated over the past twenty years indicates annual costs per PC in the thousands, not hundreds, there is much incentive for businesses to consider outsourcing at least some of the task of managing end user applications. The question will soon become not whether or not your company can trust a third-party to handle your data, but can your company afford not to?


  • Pete LoshinPete Loshin

    Pete is Founder of Internet-Standard.com, an open source and open standard computing consultancy providing technology assessment, needs analysis and transition planning services for organizations seeking alternatives to commercial software. Pete has written 20 books, including “TCP/IP Clearly Explained” 4th Edition, Morgan Kaufmann, 2003) and “IPv6 : Theory, Protocol, and Practice,” 2nd Edition (Morgan Kaufmann, 2004).

    Pete can be reached at pete@loshin.com or at 781. 859.9175.

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