Let’s suppose you’re an IT manager in a small to midsize organization, responsible for the support of 1,000 desktops in your enterprise.

You have been directed by corporate executives to determine the cost of standardizing the desktop environment on Windows NT 4.0 workstations. A quick trip to the Microsoft Web site reveals that through the Open License program, you can purchase the necessary licenses, and get upgrade protection on top of it, for a mere $276 per seat.

You provide this figure to management, who then decide to purchase the licenses and implement the OS upgrade.

No worries, right?


Calculate the real expenses
Here’s what wasn’t taken into account:

  • 20 percent of your desktops are older 486/66 machines, which can’t run Windows NT.
  • Another 20 percent of your desktops have less than 32 MB of RAM and will require memory upgrades in order to keep performance at acceptable levels.
  • You find out that the version of AutoCAD your organization uses on 10 percent of the desktops isn’t compatible with NT, and they will all have to be upgraded.

Cost of ownership
In other words, to accommodate the move to NT, you will have to spend additional money on half of your enterprise. Here’s what your purchase list might look like:

  • 200 new computers
  • 32 MB upgrades for 200 computers
  • Licensing upgrades for 100 copies of AutoCAD (it isn’t going to be cheap)

The total cost of ownership (TCO) for your enterprise has now increased sharply. And we haven’t even considered the following:

  • Labor costs of performing the upgrades
  • Extra calls to the help desk
  • Productivity losses from unanticipated downtime

An accurate, centralized asset repository would have pointed these statistics out for you—enabling you to provide management with a more accurate figure, which might have affected their decision.

Decision time
Now the organization, after realizing the complete cost of the proposed upgrade, may decide to postpone or cancel the project because the cost/benefit analysis becomes unfavorable. Or it may decide to authorize the extra capital to invest in the infrastructure in order to make the upgrade viable.

Admittedly, this is a simplified scenario. Remember that the goal of TCO analysis is not necessarily to minimize costs, but rather to make intelligent, informed decisions about IT investments. It is far better to know the real costs of a project up front so that approval decisions can be based in reality.

The alternative, discovering the “hidden costs” of infrastructure investments post-implementation, is particularly undesirable because not only do you have to spend the money to make the upgrade viable, but you also tie support resources up with addressing problems that could have been foreseen and avoided.

Wally Waltner is the senior subject matter expert on asset management at Synet Service Corporation . Based out of Minneapolis, Wally is experienced in the areas of asset management, contract administration, data processing, and technology support services. He is recognized as a Certified Applications Engineer for Peregrine Systems’ AssetCenter software through their Solution Partner Alliance. In addition, the Software and Information Industry Association recognizes him as a Certified Software Manager.

What other hidden costs have you discovered during an OS upgrade? Were there any items you felt the vendor should have warned you about? Post a comment below or send us some mail.