WOOF! Newsletter

May 10, 2018

Why Business-Grade IT Lowers Your TCO

Many companies try to reduce their IT costs by buying consumer-grade hardware and software, but they only end up spending more over time. Part 2 of 2.

PART 2:  BUY BUSINESS-GRADE, NOT CONSUMER-GRADE, ALWAYS

In the last WOOF! we discussed the benefits of standardizing your IT hardware and software environment.   In Part 2, we'll cover how Total Cost of Ownership works with IT hardware and software, and the long-term benefits your business gains from standardizing on “business-grade” IT.

Total Cost of Ownership (TCO) contains all of these costs, over the lifetime of your IT equipment:

  1. Initial Cost to Buy & Set Up (Computers, Software, Networking, Cybersecurity)
  2. Maintenance and Support Costs over time:Breakdowns, Security Breaches, Software Upgrades, Licensing Renewals
  3. Employee Productivity Downtime During Repairs

How Consumer-Grade IT Raises TCO

Like we tell customers all the time… "Pay now or pay later."

  • Pay Now (a little more up-front),
  • or Pay Later (for extra support, upgrades, hardware replacement, and downtime)

Let’s use employee workstations as an example.

Imagine buying a lower-end laptop for your company.  Maybe it has a cheaper hard drive, or less RAM than others (say 8GB).  You save $400 over the business-grade laptop your IT company specs.   While you’re at it, you purchase Windows Home Edition and save a few hundred more in upfront costs.

On install of the new device, you find that it can’t join your domain, and it can’t access the network.  Now you have to purchase a Windows Pro license for the machine. Between the cost of the license and paying a tech to upgrade it, you've paid another $500.  The drive will fail sooner than a better-quality one.  What if that happens between backups?  You'd have to pay to recover the data, as well as the cost of a replacement drive & software reinstall.

In the same vein, you're saving money with less RAM, but prepare for plummeting productivity, as the laptop works at a snail's pace!

Now let’s say you know better than to buy Windows Home Edition and you buy Windows 10 in S Mode instead.  S Mode is a newer version meant to simplify the Windows experience.  Unfortunately, that’s a problem too.  S Mode causes more business problems than it solves. Take a look at its built-in, unchangeable limitations:

  • You can only install apps in the Windows Store. No "unapproved" software allowed.
  • You cannot change the default Web browser (Microsoft Edge) or the default search engine (Bing).
  • You cannot use the command line or PowerShell. This makes the computer 10 times harder (and more expensive) to support.

Beware These Operating System Traps

Budget-conscious businesses can unknowingly fall into ‘operating system’ traps.  There are a number of Microsoft OS purchasing models:  OEM (original equipment manufacturer), Business, Box, Software Assurance, and Office 365.  What do they mean to my business?

The first three licensing models require you to manage your licensing.  With “OEM” you need to enable the license and track it yourself (most people forget to register the license, so when they need the license key down the road, they’re out of luck).  “Box” versions of software have to be physically kept in case you have to reinstall.  With “Business” you get to use the Microsoft portal to track, but you are not entitled to upgrades. 

With Software Assurance and Office 365, you have a Microsoft portal to manage your licensing and you receive all new software so you can stay up to date.  When Office products fail and they need a repair or a reinstall, the license key is required, so the Software Assurance and Office 365 options save time and money. 

They also allow you to audit your licensing and reduce spend there as well.  With Software Assurance, after three years, you own the software and the renewal is approximately 40% of the original cost.  If you plan to be in business for a long time, Software Assurance is the most cost effective over time.

How Business-Grade IT Lowers TCO

Now that we've seen what 'paying later' gets you, let's look at what 'paying now' does for Total Cost of Ownership.

Reliability

Consumer-grade IT is often built for price. Business-grade IT is built for reliability and scalability. It aims for a longer lifespan and is designed to be integrated into a business network.  Business-grade workstations like Lenovo also come with 3-year warranties—an average lifespan for a PC.  That cuts support costs down even further.

Business-grade servers and network gear should have 3-year warranties, which you can renew for another 3 years. After the 6-year mark, our experience is that network hardware "wears out" and needs replacement before issues arise.

Predictable Costs

If you've standardized your IT, then you know each PC has a set cost, with the same setup time. This also makes it possible to get bulk discounts.

Buying from a reputable VAR like PlanetMagpie ensures you're properly covered by warranties, you're fully eligible for software upgrades, and you have an IT specialist already familiar with your support needs.

Finally, since TCO is lower due to its reliability, you get more value from the overall price.

TCO is Lower When You Stick to Business-Grade IT

Bottom line:  Cheap hardware and software always costs you more over the long haul. This is why we always recommend business-grade IT hardware & software for customers. It creates a lower TCO IT environment and a more reliable IT environment for your workers.

Remember… "Pay now or pay later!"

How has your business maximized Total Cost of Ownership?  Email us your thoughts at woof@planetmagpie.com.