COM F. Troni, L. Fiering

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1 F. Troni, L. Fiering Research Note 8 September 2003 Commentary Notebook TCO Comparison: Day Extenders vs. Traveling s Notebooks used by traveling workers, who are out of the office more often and work in a greater number of nonoffice work locales than day extenders, have a 25 percent higher total cost of ownership. In the total cost of ownership (TCO) of notebook computers, the majority of the costs are indirect (unbudgeted) costs from end-user operations (the costs of end users supporting themselves and their peers rather than relying on formal IS training and services) plus downtime (lost productivity from scheduled and unscheduled loss of system hardware, applications or network availability). The extent of these indirect costs will vary with the notebook usage pattern. Day extenders and traveling workers (often referred to as "road warriors" in the United States and Europe) represent opposite ends of the spectrum in terms of usage patterns. Although numerous other profiles exist between these extremes, these two user profiles help illustrate the TCO impact of different usage patterns. The traveling worker is defined as someone who works outside the traditional office environment 80 percent of the time. Often these workers will use their notebooks in a variety of nonoffice environments including hotels, airports and customer sites. Day extenders work mainly in an office environment and bring their notebooks home only one or two nights a week. In the most real sense, day extenders demonstrate the simplest notebook computing environments while traveling workers demonstrate the most complex (more time out of the office and more unique connection environments). As always, complexity leads to higher TCO. This is clearly demonstrated by the fact that notebook TCO for traveling workers is approximately 25 percent higher than for day extenders (see Table 1). Gartner 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Table 1 TCO Summary: Notebook PCs Day Extender Day Extender Traveling Without Wireless Without Wireless Without Wireless Traveling Without Wireless Hardware and Software $1,781 $1,781 $1,830 $1,830 Operations $680 $679 $771 $770 Administration $488 $488 $495 $495 Total Direct Costs $2,949 $2,948 $3,096 $3,095 End-User Operations $2,971 $2,971 $4,314 $4,314 Downtime $260 $249 $338 $324 Total Indirect Costs $3,231 $3,220 $4,652 $4,638 TCO $6,180 $6,168 $7,748 $7,733 Source: Gartner Dataquest (August 2003) Notebook TCO remains from 34 percent to 68 percent higher than desktop PC TCO, depending on the type of notebook user. As a result, from a TCO perspective, it does not make sense to provide notebooks indiscriminately in cases in which desktop PCs will suffice. However, for workers with a requirement for working outside the traditional office environment for as little as a few hours a week, there is a clear return on investment that should be factored into purchase considerations. It also cannot be stressed heavily enough that best-practice management can reduce notebook TCO, significantly lowering the gap between desktop and notebook TCO. New in This Notebook TCO Update This update contains the following new information: Notebook lifetime has been extended to three years. Notebooks are being kept in the enterprise for a longer period of time. Five years ago, the average lifetime of a notebook was 2.5 years. Currently it is three years. Hardware price drops have been factored into the capital costs. However, mainstream notebook users in midsize and large enterprises have followed the price curve down a bit but largely seem to have opted for more features and functionality within a particular range. In addition, the software load has grown larger and more complex. These changes have resulted in decreased hardware and software costs, but the total decline may not seem as dramatic as many of the ads for low-cost consumer notebooks would lead one to believe. Notebook hardware configurations assume built-in wireless LAN (WLAN) capability. Gartner Dataquest recommends that all notebook purchases include built-in WLANs, even if the organization does not have campus WLANs installed. The rationale is that within the three-year lifetime of the notebook, there is a high probability that a WLAN will be installed. In addition, the number of public "hot spots" in hotels, airports and other public places is exploding. However, the notebook TCO profiles in this research do not include the cost of actively using the WLAN. These additional costs are summarized in Table 2. 8 September

3 Notebook user profiles now include in addition to. Downtime has been separated from end-user operation cost to reflect lost productivity because of factors that are totally outside of the users' control. Disposal costs have been added. Recent legislation in the European Union has mandated greater attention to disposal issues. Although the United States has not passed any formal legislation, several bills have been proposed and the Environmental Protection Agency has been actively involved. Table 2 Notebook TCO Summary: With Wi-Fi Day Extender Day Extender Traveling Traveling Hardware and Software $1,799 $1,799 $1,848 $1,848 Operations $710 $710 $801 $801 Administration $488 $488 $495 $495 Total Direct Costs $2,997 $2,997 $3,144 $3,144 End-User Operations $3,175 $3,119 $4,591 $4,499 Downtime $260 $249 $338 $324 Total Indirect Costs $3,435 $3,368 $4,929 $4,823 TCO $6,432 $6,365 $8,073 $7,967 Wi-Fi TCO $251 $197 $325 $234 Source: Gartner Dataquest (August 2003) Defining Notebook User Profiles Day extenders work in the office about 80 percent of the time. They take their notebook home one or two evenings per week or on weekends and tend to use their notebooks in a limited number of settings. Travel to new locations is infrequent. Because the office is their main work location, day extenders have access to technical support and to all the resources normally available in the corporate premises. When day extenders are not in the office, they tend to work from the same recurring locations, that is, home and, perhaps, a local hot spot such as Starbucks. Once day extenders have learned how to connect to the network from their preferred locations, they generally need little additional formal or informal support. The result is lower IT operation and end-user operation costs. Traveling workers work from remote locations 80 percent of the time. They are typically salespeople, executives, consultants and so on. They may travel small distances and get back to their office or home every day as well as travel to different cities or even to different countries, being away for prolonged periods of time. They need to connect their notebooks to the office in a variety of places and circumstances, such as from airports, trains, cars, hotels and customers' premises. Because of the distance from office resources, support for traveling workers is much more complex. Traveling and difference in time zones make access to corporate technical support limited. Also, limited access to the connection and low bandwidth substantially reduces the effectiveness of some of the manageability, support and security tools commonly used by enterprises. For all these reasons, when traveling workers are on the road they rely mainly on self-support and casual learning. Furthermore, because of extensive traveling, the traveling worker's notebook is more likely to undergo 8 September

4 stress, wear and tear on batteries and damage to the most delicate components, leading to higher downtime costs. Day Extender vs. Traveling s Hardware and Software For our notebook TCO profiles, notebook configurations for day extenders and traveling workers are nearly identical, with only minor variations in accessories. Because traveling workers have to carry their notebooks a good portion of their day and need to work in environments where AC power is not readily available, they have made "thin and light" notebooks with three to four hours of battery life the mainstream choice. On the other hand, because day extenders have little travel and tend to have AC power available in the majority of their work situations heavier, lower-cost notebooks with a shorter battery life than those of the traveling workers are likely to be suitable. However, choosing too many different notebook models introduces heterogeneity, a major complexity factor that has an impact on TCO by raising system image development costs, support costs and so on. Thus, Gartner Dataquest recommends using the "mainstream" configuration listed here for both notebook user profiles. The recommended notebook configuration is: 1.6GHz Pentium M processor 256MB RAM 14-inch display Integrated graphics 40GB hard drive DVD/CD-RW optical drive 10/100 network interface card Port replicator Second power supply The configuration for traveling workers also includes a second battery. Day extenders may opt for an external monitor, which is not included in the TCO profile. The assumed asset life in all notebook TCO profiles is three years, extended from 2.5 years. This reflects Gartner Dataquest recommendations and user practice. The hardware and software category also includes expense items such as spare parts, supplies, electricity and software maintenance fees. Total hardware and software costs for traveling workers are $49 higher than for day extenders. Operations Operations costs for traveling workers are 13 percent higher than those incurred for day extenders because of the higher costs of delivering technical support to a remote user. Service desk calls account for the majority of the increased operations costs. 8 September

5 Administration Administration costs include asset management, security, formal and informal audit, and installation costs. All of these tasks are more difficult for notebooks than desktops, which is reflected in a considerably higher TCO. Administration costs for day extenders are modestly lower than for traveling workers. End-User Operations There are big differences in end-user operations costs for notebooks used by day extenders and traveling workers, and this is entirely because of the different usage patterns for each. The cost of peer support is relatively high for notebooks used by day extenders, who work in the office most of the time. Conversely, traveling workers, who by definition spend most of their working time on the road, rely on self-support and casual learning. End-user operations costs for traveling workers are about 45 percent higher than those incurred by day extenders. Downtime For day extenders and traveling workers, the cost of downtime diminishes moving from to. In general, downtime costs for traveling workers are as much as 30 percent higher because of more wear and tear on the hardware, leading to more failures. The remote nature of traveling workers also makes repair turnaround longer. End-User Best Practices for Reducing Notebook TCO The following end-user practices can reduce notebook TCO: Minimize the number of notebook models deployed to minimize the number of system images and to reduce service desk staff training requirements and maintenance costs. Deploy on notebooks since it is the most "mobile friendly" of all Windows versions, resulting in lower end-user operation and downtime costs. Ensure that the service desk is available in all geographical areas and time zones visited by traveling workers. Consider 24x7 availability. Ensure that warranty and break/fix repair have fast turnaround for remote workers. Use "mobile-friendly" management tools for asset management, software deployment, backup and so on. Vendor Best Practices for Reducing Notebook TCO The following vendor best practices can reduce notebook TCO: Provide international support and warranty services. Expedite turnaround for notebook repairs. Improve Web-based support with patch, driver and update downloads readily available. Provide "mobile friendly" management tools and life cycle services for system image management, asset management, software deployment, back up and so on. 8 September

6 Develop built-in diagnostics and failure prediction tools coupled with tools to expedite failure recovery such as image or data restore. Bottom Line: Day extender and traveling worker user profiles represent two extremes in notebook usage patterns, ranging from the simplest in terms of time away from the office and numbers of remote locales to the most complex. The simpler usage patterns of day extenders are reflected in a 25 percent lower TCO number. Organizations need to adjust their own TCO numbers to reflect the usage patterns of their workers. With any user profile, notebook TCO can be reduced by implementing best practices. 8 September