ManagementSpeak: Cost of ownership has become a significant issue in desktop computing.
Translation: We want all of the benefits and none of the costs.
Our contributor this week wants to remain anonymous.

If I were starting a business today, I wouldn’t dream of using Microsoft Office.

No, Corel hasn’t bribed me. This is simple economics. Corel has priced its office suite so much lower than Microsoft I can’t imagine enough of an incremental benefit to MS Office to cover the spread.

Very few of InfoWorld’s readers are opening a business today, but many of you have MS Office ’97 staring you in the face. There’s no concurrent use licensing, file formats aren’t backward compatible, and it costs a lot of money compared to its competition.

Besides, many of you have expressed strong interest in the NC, which means you’re open to non-Microsoft applications. If you’re going to make your move, now’s the time.

Last I heard, IS budgets were still pretty tight, so the savings should be pretty interesting to a frugal CIO. “Except,” I can hear some of you thinking (I have mentioned my telepathic abilities, haven’t I?) “software is just a small part of the total cost of PC ownership. So this will just be nibbling around the margins.”

The numbers you hear bandied about on this subject are ridiculous. If you really believe each PC costs you eleven grand a year, put out an RFP. Any number of outsourcers will be delighted to provision your desktops for at least 20% less than that (I’d make the offer myself, but I don’t like lines that long).

So here’s what I’m going to do. Over the next few months, as a bizarre hobby, I’m going to put a better model together. InfoWorld’s Features and Test Labs may join me … we’re still working out the details. The point of this model won’t be the “real” costs. The point will be to help you probe the issues you face managing this resource, so you can make realistic decisions.

Here are the key elements this kind of model needs:

Fixed and Variable Components: Any useful financial analysis separates costs into those that don’t vary with volume and those that do. Analysis often benefits from separating “semi-variable” costs – those that increase in large steps at certain volume increments) – from purely variable costs.

Partitioning of Benefit-driven Expenses and Overhead: Some expenses increase as employees take greater advantage of technology. Training is a good example: the higher your training costs, the more different applications employees know how to use, which means they’re gaining more value from their systems. On the other paw, you have to spend some money before the employee ever turns the system on. Include network connections in this category. Understanding the difference is critical.

Separation of Non-Technical Issues: I’m heartily bored with hearing how much time goes into managing hard disk space, doing backups, and all the related drivel. Take away the PC and employees will spend more time than that handling and filing paper, cleaning out filing cabinets when they get full, and wasting all the other time that gets used with non-technical alternatives. If we include these costs at all it will be as negative numbers, crediting the time saved from doing things the old ways.

Recognition of the Real World: PC cost models pretend we work rigid schedules at hourly rates. Time spent in non-value-adding activities like training is lost to the organization.

It’s a great theory that ignores our day-to-day experience. When most of us take a vacation, our coworkers absorb some of our work and the rest piles up until we get back. We deal with it when we return, and our vacation (or training class, or whatever) costs our employers effectively nothing.

Still believe each PC costs you $11K per year? Call me … I’m selling shares in a bridge crossing the East River, and I’m just sure you’ll want a piece of the action.