IT Solutions for Small Business
(877) 256-4426


Five Hidden Costs of Computer Software That You Can Avoid

How much does a new computer cost? Most companies will answer based on the price tag – 800, 1000, 1200 dollars.

But the Total Cost of Ownership – how much your computer will cost your company over its entire lifespan – is much, much higher.

Gartner Research, Inc. released a study years back reporting that the Total Cost of Ownership (for a computer kept for several years) is usually 12 to 16 times that of the computer purchase price. Companies doubting the numbers and testing it out were surprised to find that it was often higher than that.

Where do these hardware costs come from and how can you keep them down?

1) Installation

Any new computer or piece of hardware needs an IT technician to set it up, and install any requisite programs and integrate it into your network.

2) Maintenance

Things break. Computer hardware is no exception. Whether from negligence, misuse, or just growing older, a malfunctioning computer needs an IT technician to come in and spend billable hours working to fix the hardware and make it functional again.

The older the hardware gets, the more it tends to be incompatible with the new software and apps that you’re trying to integrate, requiring more technician hours to keep it operating and raising the TCO.

3) Removing viruses and malware

This is similar to maintenance, but is related directly to usage of the computer. Your users will open emails, browse the web, install programs and addons… not all of which are innocent and helpful. The computer can be slowed down or rendered nonfunctional, and again, the technician has to come in and spend time getting the computer back into shape.

4) Upgrades

Run out of memory? Need a new operating system? Upgrade cost is comprised of technician hours and of the necessary parts and supplies needed for the upgrade.

5) Backup and recovery

Your data is the backbone of your business. You have to ensure its viability even if disaster or human error sends that data to the land of no return. Backups on tapes and disks have been the choice for years, and recently backup to virtual locations in the cloud have been the up and coming option. Local backups cost you the cost of the materials and the workhours needed to run the backups. Virtual backups usually cost a monthly fee.

While you can’t eliminate these costs entirely until they invent the unbreakable supercomputer that updates and maintains itself, here are ways to keep costs down:

1) Cloud computing

Migrating hardware needs (like servers and even workstations) to the cloud means that they don’t require you to call in a technician if they go on the fritz. Any issue is solved by the cloud services provider and usually part of a set monthly or yearly fee. And their tendency to go on the fritz is vastly reduced because any reliable cloud services providers will have redundancy, so if one data center is having issues, you’ll just be getting your data from the redundant servers or other data center without users noticing the difference. That reduces your downtime, yet another hidden TCO cost – the reduced earnings your hardware causes you when it decides to be nonfunctional for a few hours.

2) Don’t hang on to hardware

It’s hard to spend a significant chunk of money on a new computer, so you may be tempted to milk every last unit of processing power out of those desktops you bought 6 years ago. Be aware – the older a computer gets, the more it tends to need maintenance. By hanging on to that computer, you may actually be using the money you could have bought a new computer with to maintain a grumpy old computer with sub-par performance.
Another option to eliminate this issue all together is to use a HaaS (Hardware as a Service) provider. You pay for the computing power, not a specific piece of hardware. If any piece of hardware malfunctions, it is the service provider’s responsibility to replace or fix it without any user interruption.

3) Managed IT services with monthly flat rates

When you’re using technicians who charge by the hour, your expenses tend to go up fast – usually in parallel with your blood pressure as you wonder why the technician is taking so long. Signing up for an IT service at a flat monthly rate that includes on-site visits from technicians will keep TCO costs predictable and not ballooning out of proportion.

4) Locking down computers, especially laptops

The more freedom you give your employees with your computers, the higher TCO costs go. Adware, malware, spyware, unnecessary programs and addons congregate on an open computer, slowing it down or paralyzing it entirely. And then you have to pay someone to fix it. Gartner released research a few years ago showing that a locked and well-managed PC can have a TCO 42% less than an unmanaged one, and a laptop TCO can be reduced 45% by locking it. Their 2013 update continues to demonstrate the difference.

Sometimes locking it down isn’t relevant, as in the case of employees who work on the go and need the flexibility to modify settings. Other times a lockdown can cause a significant increase in support calls because the user is entirely dependent on the IT support to do anything. In those cases, even moderate management can reduce the TCO by 24% – still a significant benefit.

5) Get what you need, not more than you need

With the rate at which you produce data, do you need your data backed up every two hours or every five minutes? If it’s only every two hours, don’t be convinced into taking an “every five minutes plan” if it’s going to cost you more. Get upgrades that you will actually use and will produce an ROI for your business. If a lesser upgrade would get you the same ROI, do that instead. If you buy a high-power, multiple processing unit laptop for a user who basically needs to access one company program and do data entry, you’re wasting your money. Sometimes less is more.

But don’t skimp and buy sub-par equipment for your business. If you buy a low-performance laptop for a power user who needs several programs open at once in addition to an internet browser with 10 tabs, he will wear his computer down very fast.

Hardware as a Service, mentioned above, is also helpful here to get the exact hardware which will meet your needs.

Hardware is a necessary IT expense. With the above tips you can be a more educated consumer in the effort to keep your hardware TCO as low as possible.