Vendors tout cost of ownership in new wares

As the fiscal 1997 buying season kicks off this week with the FOSE show in Washington D.C. federal PC buyers can choose from a host of new desktop options designed to reduce the cost of maintaining and supporting standard PCs.

On display at FOSE will be "network computers " or NCs one of several industry solutions to address concerns about the total cost of ownership associated with PCs. NCs from such vendors as IBM Corp. Network Computing Devices Inc. and Sun Microsystems Inc. are now available on the General Services Administration schedule generally for less than $1 000.

Traditional PC makers are countering the NC with total-cost-of-ownership initiatives of their own. Many vendors are bundling software and tools that help administrators manage PCs remotely. At the same time PC makers and resellers are beefing up their support and software upgrade programs.

Additionally later this year government buyers may be able to purchase a NetPC which is a streamlined easy-to-manage desktop that feels like a traditional computer. Microsoft Corp. and Intel Corp. last week released for comment NetPC system design guidelines with product announcements expected within 90 days from such vendors as Compaq Computer Corp. and Dell Computer Corp. at price points similar to the NC.

Both the NC and PC camps are relying heavily on centrally managed servers for storing applications and data. This tactic vendors said avoids the cost of upgrading and managing widely distributed PC hardware and software. According to industry estimates these desktop administration costs can represent as much as 90 percent of the cost of ownership over the life of a system. In January The Gartner Group Inc. a Stamford Conn. consulting firm put the annual cost of PC ownership at nearly $10 000 a year.

William Kirwin a vice president with The Gartner Group said the government's total cost of ownership falls within the commercial sector's range. He noted that the government compared with the private sector tends to hang on to technology longer which creates complexity because multiple generations of technology must be supported. On the other hand the government has a greater ability to set standards which can lower costs he said.

Buying Shift Ahead

Although federal buyers are not poised to make dramatic changes in their desktop purchases - at least not this fiscal year - a gradual shift in buying patterns appears possible in the months ahead.

In a speech last month Vice Adm. Arthur Cebrowski the Navy's director of space and electronic warfare predicted that the Defense Department eventually would cut back on its PC and workstation purchases in favor of a more "network-centric" approach to computing.

With the increased squeeze on budget dollars "the services will stop buying workstations...and just buy applications [for the server] " Cebrowski said. While end users may prefer to have PCs to run applications locally "we can't afford to have systems for all these things and frankly we don't need them " he said.DOD and other agencies are becoming aware that the majority of desktop costs are sunk in such areas as technical support software updates training network administration and - in the case of system failures - user downtime.

A January study published by The Gartner Group places the annual cost of owning a networked Microsoft Windows 95-based PC at $9 784. Those kinds of numbers have inspired some vendors to develop an alternative class of desktop device such as the NC.

It is not clear how quickly agencies will adopt NCs. Products are just hitting the market this winter and no agency has made a large purchase yet. However that could change as more NC-ready applications become available and as agencies figure out what role NCs can play in their operations.

For example NCs are not expected to have a big role at Transportation Department headquarters "because almost everybody has a PC on their desk " and that seems unlikely to change said Diane Litman manager of the information resources management division at DOT.

However NCs could play a role in field offices where there are not so many computers she said. These offices might opt for low-cost devices Litman said.

The Defense Logistics Agency depending on its budget would like to conduct an NC pilot said Thomas Knapp chief information officer for DLA. "We have been wrestling with our whole IRM budget and one of the things that is becoming clear is our [PC] clients have gotten pretty big and we are not sure in all cases that it makes sense to have everybody on a very robust client base " Knapp said.

In some cases the transition to NCs may be gradual vendors said. Various DOD and civilian agencies are considering developing applications in Java a programming language that lets end users download applications from an Internet server on an as-needed basis. Although Java applications can run on any 32-bit platform NCs are designed specially to run such applications.

Sun which developed Java believes agencies that start off using PCs or workstations to run Java applications will move some users to NCs when their desktops need to be replaced.

That could be the case with the Navy's Joint Maritime Combat Information System its automated command and control program said John Leahy group manager of government relations at Sun Federal. Sun last month signed a cooperative research and development agreement with the Navy to develop a Java-enabled version of JMCIS.

This week at FOSE Government Technology Services Inc. will be displaying Sun's NC JavaStation bundled with a Java-enabled office application suite that includes WordPerfect and other software from Corel Corp. as well as Java-based videoconferencing software from PictureTalk Inc. Pleasanton Calif.

"We have a few agencies that are seriously looking into it " said Rob Hager business manager for the Sun technology team at GTSI.

PC Vendor Initiatives

Roger Harden director of marketing with Dell Federal Sales said the government is behind the private sector in using the total-cost-of-ownership concept to "drive procurements."

Harden said the lag partly stems from the government's pre-acquisition reform history of purchasing products based on lowest price. "The idea of best-value needs to be continued" to advance the total-cost-of-ownership cause he said.

The Microsoft/Intel NetPC specification has thus far been the PC vendors' most visible response to the total-cost-of-ownership question. Microsoft and Intel announced last week that PC makers will start shipping NetPCs within 90 days.

In the meantime PC vendors are emphasizing existing product features that reduce the total cost of ownership. Many vendors for example cited support for the Desktop Management Interface which provides a common way to collect systems management information from PCs. The objective is to make it less expensive to maintain and update PCs. DMI is being advanced by the Desktop Management Task Force led by Microsoft Intel Compaq and Dell among other vendors.

Dell said all its OptiPlex desktops are DMI 2.0-compliant according to Pamposh Zutshi group manager for OptiPlex in the Americas. OptiPlex PCs are available through the GSA schedule. As for the future Dell will stay at the "leading edge of the latest implementation of DMI" and continue work on a systems management initiative Zutshi added.

Gateway 2000 Inc. the top-ranked PC maker on the GSA B/C schedule is also emphasizing DMI. Craig Marzolf a product manager in the Americas region at the company said every desktop computer shipped on the GSA schedule should have DMI certification.

DMI will "allow for much better administration of PCs in a network environment " Marzolf said.Micron Electronics Inc. meanwhile supports DMI in its server and ClientPro desktop lines. In addition the company is now bundling Intel's LANDesk software with all its desktop and server products. LANDesk monitors the health of servers handles software distribution within organizations and tracks software licenses. Micron products are available on the GSA schedule and on such contracts as the Air Force's Desktop V.

With these management tools an agency can "buy a server and client that can see each other and understand each other and can be managed on a network " said Jeff Moeser director of desktop and server product marketing at Micron.

Support Policies Improved

PC makers and integrators holding large contracts also emphasize post-sales support as a key ingredient in reducing the total cost of ownership.

"The value in what we provide is in an after-sale environment " said Joe Triano Electronic Data Systems Corp.'s program manager for the National Institutes of Health's Electronic Computer Store contract.

"Post-sales support is the most salient element " added Pete Carrier deputy program manager for Hughes Data Systems' Desktop V contract. The vendors on the Desktop V contract Hughes and Zenith Data Systems are required to provide 24-hours-a-day support seven days a week on Desktop V and to offer a five-year global on-site warranty that dictates machines be fixed within 24 hours.

The on-site maintenance eliminates the downtime associated with having to ship a PC to be repaired at the vendor's facility Carrier said.

Both vendors also must provide free software upgrades through mid-1999.

For example the primes are providing Desktop V customers with free upgrades from Microsoft's Office 95 to its current Office 97.

Paul A. Strassmann a consultant and author based in New Canaan Conn. has studied total cost of ownership and says most of the issue "has nothing to do with the hardware configuration. Human and organizational factors in my opinion are far more important."

Strassmann who was the Pentagon's director of Defense information in the early 1990s said he encountered "incredibly high" desktop ownership costs within DOD - up to $30 000 per seat.

The problem he said was insufficient support. "Employees were spending an inordinate amount of time fixing things or waiting for service.