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NEW DELHI
NOVEMBER 23, 2006
A recent study by Foster & Sullivan on the total cost of ownership (TCO)
revealed that Microsoft Windows 2003 environment across enterprises has close to
15.9 percent advantage over Linux and constitutes lower TCO in 80 percent of the
instances encompassing application servers, network servers, and mail servers.
The research was conducted on 54 organizations (both high end and mid-tier)
across BFSI, manufacturing, public sector and government, ITES, BPO and telecom
verticals.
The target respondents consisted of senior IT professionals (consisting of
CIOs, CTOs, heads of information technology, general managers – information
technology, senior IT managers, senior system analysts) of large and mid-sized
enterprises (500 and more employees).
The report was audited by Cap Gemini and commissioned by Microsoft.
According to Frost & Sullivan, the TCO consists of the cost incurred by
an enterprise in the course of selection (search and evaluation), installation
(capital and deployment cost), maintenance and deployment (both planned and
unplanned), and upgrades of software systems over the course of five years.
It also includes indirect costs associated with planning, audit, and other
incidental costs such as consulting, roll-out, configuration management,
bug-fixing and testing, and module integration. Interestingly, in India,
hardware is the largest component of TCO of Indian enterprises, where software
costs are just about 15 percent of the Capital expense and 6 percent of overall
TCO.
Elaborating on this study, Dr TR Madan Mohan, director – Consulting, ICT
practice, Frost & Sullivan India, said, “While assessing the TCO,
organizations should evaluate the CAPEX and OPEX of the specific IT investment
throughout the life cycle of the asset. More often than not, the focus is just
on CAPEX, which leads to skewed decisions. Specifically while comparing
proprietary software with open source software, the CAPEX constitutes 53 percent
of the TCO and OPEX constitutes 47 percent.
Our analysis shows, while CAPEX for the Linux operating system might be low
but the OPEX could be as much as 53.1 percent higher as compared to the Windows
2003 operating system, primarily due to the high cost of support and manpower.
Hence, it is prudent for an organization to capture all necessary cost
components beyond just the initial cost of acquisition.”
He further added, “Our research revealed that, for application servers,
Microsoft Windows 2003 emerges with the lowest TCO which is 22.4 percent lower
than Linux where as for network servers and mail servers, it is 11 percent and
8.24 percent respectively, lower than Linux. Linux platform offers a TCO
advantage of 4.7 percent in file print server and 24 percent in web server over
Microsoft Widows 2003. However, costs of maintenance and upgrades of file print
server for Windows 2003 are lower than the Linux environment.”
With business understanding about IT in most organizations on the rise, Frost
& Sullivan foresees that more and more IT professionals will begin taking
into account the support costs, application integration costs, performance
considerations, and availability of IT skill to implement and maintain a
platform before they decide on a particular one.
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