Over the past year, the cost of Unix-based systems have fallen by an average of 20% across the mid-range, and proprietary hardware by an average of 17.5% with hardware falling faster on high-end systems, but the price difference of hardware between proprietary and Unix-based systems can be as much as 25% for systems of comparable capacity. These are some of the findings of the Midrange Systems Report 1991 compiled by London, EC4-based Touche Ross Management Consultants and Ideas International Pty Ltd of Abingdon, Oxfordshire, which suggests that the fall in prices on high-end systems is a move by manufacturers to bring them into line with equivalent smaller systems. A comparison of the MIPS ratings of Unix-based systems between 1991 and 1990 indicates a 59% increase in aggregate processor performance over that period, particularly in the 160 to 200-user group, where average MIPS ratings have doubled with the rapid rise in the number of dual, triple and four processor systems. Terminals and printer costs have fallen at a slower rate than those for processors and their components over the period so that the proportion of the overall cost represented by peripherals has risen. At the same time, there are broad variations in both the per-unit cost of similarly performing devices, and in their maintenance. Small differences in unit price of low cost but high-volume items such as terminals can be magnified to the point where they may eclipse savings made by discounts offered on high-cost, low-volume items. Systems that have the lowest initial cost may not end up as the most cost-effective over several years. Hardware and software maintenance charges continue to be major differentiators in this area. The report presents a view of the market as of October 1 together with surveys and analysis on the cost of ownership of mid-range systems from UK suppliers in both the Unix and proprietary markets. Ten companies participated in the survey, IBM, Digital Equipment Corp, Hewlett-Packard, ICL, Bull HN, Unisys, NCR, Compaq, Wyse Technology and Texas Instruments and the intention is to provide objective comparisons for buyers of the costs involved in buying a mid-range system.
Five-year cost of ownership
It models the five-year cost of ownership of supplier responses to a hypothetical tender document issued by Ideas International that describes four distinct multi-user scenarios. The scenarios define a workload of relational database and office automation application users, along with specific requirements for minimum peripheral components, such as disk storage and back-up devices. Each also defines an increase in workload after three years, with associated increases in the amount of disk storage and other peripheral devices required. However, the authors admit that the methodology represents a compromise, as the criteria for cost of ownership are limited. For example, factors such as personnel and environmental costs are significant but the report says they are ‘highly site-sensitive’ and therefore cannot be forced into a generic scenario. In addition, inflation, the depreciation in the value of the equipment and the time value of money were not taken into account. The criteria used were: the list price of all hardware components for initial and growth requirement stages; the impact of discounts; maintenance charges payable on each component over the five-year period; the initial list price for the appropriate operating system; the licence fee and support for the operating system and the impact of standard warranty periods. Ideas International provides comparative computer system information to hardware suppliers, corporate users, consultants, government agencies, research companies and newspapers. It is an independent, unaligned organisation. The report is available from Touche Ross or Ideas and is UKP195.
