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The Way Business Is Moving

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Issue Date: April 2006

Understanding the TCO of mobile computers

1 April 2006
Barry Baetu, MD Harmonic Group

The purchase cost of any IT solution is only a portion of the real cost. The difference between the real price and the purchase price is even greater when dealing with mobile devices.
Barry Baetu, MD Harmonic Group
Barry Baetu, MD Harmonic Group
One of the first questions asked when making an IT acquisition - or any acquisition for that matter - is how much does it cost? Generally this is followed by differentiating the features and values from different vendors and then assessing the cost of deploying and sustaining these products in a mobile enterprise environment.
While it is easy to calculate the purchase price of the hardware and licence fees, companies often find that their IT operations, support and software maintenance costs spiral.
When evaluating a mobile automation project, conducting a complete TCO analysis will reveal the hidden costs in selecting a low-cost, non-enterprise class device. It will also demonstrate how an industrial mobile computing solution designed for everyday mobile environments prove to have value beyond durability. Users of rugged mobile devices can also look forward to a considerably longer lifespan than non-rugged equipment.
Enterprises that use low-cost non-rugged mobile computers pay a high price in repairs, increased support needs and lost productivity. These costs exceed any purchase price savings within just two years. Over the life of the system, downtime typically costs enterprises that use non-rugged computers approximately four to five times more than the purchase price of the device.
A study by Venture Development Corporation (VDC) showed that for every rand spent on capital computing equipment, it costs four to six times more in additional investment to cover sustaining and intangible costs (such as staff). These costs have been documented at 10 to 40% higher for organisations that use consumer-grade mobile computers compared to those that use rugged devices for enterprise applications. That is why the majority of companies who took into account TCO when planning a mobile deployment bought rugged mobile computers instead of consumer-grade devices.
In just two years, rugged mobile computers provide a TCO advantage over consumer-grade devices. Durability is a big factor. After this period, 35% of consumer-grade devices had been replaced, compared to only 2% of rugged; after year three, 80% of the original consumer devices had been replaced.
While a low-cost mobile computer may appear to be the best purchase, lack of integrated features and frequent downtime can quickly eliminate the price advantage, and cost many more rands in lost opportunity. For workers who operate in extreme temperature environments or humid or dusty conditions, inadequate seals on consumer devices can cause condensation on electronics or other damage to internal components.
Drop-test ratings provide an indication of how the computer will perform after being dropped. This is an important consideration for industrial applications, where a five-foot drop to concrete is likely, compared to office applications where a PDA is more likely to drop onto a conference table or carpeted floor.


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