Distributed networking systems are more cost-effective to run than centralised ones, according to a report by Michael Treacy from Massachusetts Institute of Technology’s School of Management. The report, which claims distributed networking configurations can be half the cost of centralised systems, is based on a Network Systems Ownership Model, originally presented at DECworld ’88 in Cannes last September. It measures total system life cycle costs as opposed to initial hardware acquisition costs, and was designed to help decision makers examine all of their future network system costs more effectively, before installation. System life cycle costs are now increasingly important because the initial cost of equipment accounts for only 15% to 25% of the total cost of ownership over a five year period, says the report. Divided into three parts, the costs are: installation and acquisition, operations and real maintenance, and incremental and change. There are five cost components within each of the three stages: equipment, software, personnel, communication carriers and facilities (wiring and space costs). Treacy studied all of these and concluded that personnel and communication form a substantial part of the total life cycle costs. Analysing the benefits of alternative network designs and vendors in organisations, Treacy found that centralised company environments are more expensive to run than distributed processing ones – $6,369 per port as opposed to $2,757. In the test, distributed DEC sites were claimed to be cheaper than similar IBM ones, $2,710 against $3,456 per port over five years. Generally, in a centralised system, personnel costs were found to be 89% greater and communication costs almost 13 times as great as those for a distributed network. The higher cost of these systems seems to be due to their inherent unreliability of design, according to Treacy. Additional equipment and personnel costs are attributed to attempts to match the availability of a distributed network. More network.cw 8 ing staff mean higher personnel costs, redundant back-up hardware contributes to increased equipment costs, and the amount of central host processing translates into greater telecommunication costs.
