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Cost

    There are three issues to consider in cost: initial purchase price, total cost of ownership, and cost/benefit ratio.

    “Most technology committees concentrate their budget and planning efforts on the acquisition of next-generation software and hardware. But hardware and software costs represent a small fraction of the total expense of networked computers. Accordingly, this focus overlooks the most important factors driving the rising costs of law firm computer systems. The neglected costs are management and labor expense.” — Kingsley Martin^w29

    “The bottom line is, which is cheaper? Hardware costs, software licenses, technical support agreements, prices of upgrades/service packs, costs of hardware upgrades, profits lost for every hour of downtime, personnel costs for recovering/recreating data lost due to product defects in the operating system and/or hardware platform required by your choice of operating systems, and personnel costs for systems administrators, these are only some of the factors that contribute to the overall budget resulting from your decision. It is not a trivial consideration. Although money is the bottom line for you as a manager, given the complex set of factors I’ve just presented, a technically superior combination of server hardware and operating systems could prove to be less expensive in the long run.”—John Kirsch^w22

    Note that in some cases it may be difficult to come up with a meaningful initial cost figure because of integration of the costs of hardware and software.

initial purchase price comparison

Price listings are for courtesy purposes only and may be changed by the referenced businesses at any time without notice.

all prices in U.S. dollars for U.S. delivery

note: This table will not display until the entire table has been downloaded to your computer. Please be patient.

operating system	standard price	academic price
AmigaOS	under $100e95	???
BeOS/Intel	$69.95w14	nonew14
BeOS/PowerPC	$99.95w14	nonew14
BSDi Internet Server	$995w40	availablew40
DEC VMS	repl3	repl3
DEC ULTRIX	???	???
Digital UNIX	???	???
FreeBSD	freew16	freew16
HP-UX	???	???
IBM AIX	$50 (single user)e67	???
LINUX	freee1	freee1
Macintosh OS X (ten)	$129	???
Macintosh OS X Server (ten)	$499	$250
Macintosh System 9	$99	???
Macintosh System 8	$99	???
Macintosh System 7	freee128	free
Macintosh System 6.8	free	free
MS-DOS	???	???
NetBSD	freew18	freew18
NetWare	???	???
NeXT	repl4	repl4
NeXTSTEP	repl5	repl5
OpenBSD	freew21	freew21
OpenSTEP	???	???
OpenVMS	$3,700 and upe85	hobbyist freee85
OS/2	$250	???
Pyramid	???	???
Rhapsody/PowerPC	$499p1	$250
Rhapsody/Intel	n/a1	n/a1
SGI IRIX	incl2	incl2
Santa Cruz Operations (SCO) OpenServer	$1,399m1	freee119
SCO UnixWare	???	freee119
Sun Solaris	$695w40	Free single user
Solaris X86	???	Free single user
Sun-OS	???	???
Windows 2000 Advanced Server	$3,999w50	nonew50
Windows 2000 Server	$999w50	nonew50
Windows 2000 Professional	$319w50	nonew50
Windows NT Server Enterprise Edition	$3,999w1	nonew2
Windows NT Server 4.0	$1,129w4	$679w5
Windows 98	$209w7	nonew8
Windows 95	$109w10	nonew11
Windows 3.1	???	???

1: Not yet available to the public.

2: Only available included with SGI hardware.

3: Replaced by OpenVMS.

4: Replaced by NeXTSTEP.

5: Replaced by OpenSTEP.

    “Although Windows NT Server 4.0 can be more expensive than some commercial UNIX operating systems, it can be had for trivial amounts at trade shows.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

     “Maggie Biggs, a senior analyst in the InfoWorld who specializes in database technology and application design, development, and deployment via intranets and other networks, estimates a price of $4,636 for a comparable Windows NT 4.0 solution in her article which compares NT 4.0 to Red Hat’s commercial Linux (for only $49.95). Here one sees that successful marketing can often distract customers from considering their need for functionality.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

     “Still, many companies that have no prior experience with Unix Unix or host systems see NT as a perfect platform for getting started. Net-Temps Inc., a two-year-old online recruitment firm, works with 1,000 staffing firms looking for IT talent. Last year, it needed to upgrade its server. Since the company wasn’t saddled with legacy systems, NT seemed like the best option. ‘We looked for a better, bigger box,’ says Kevin Strange, Net-Temps’ technology VP. ‘I couldn’t justify a $30,000 Solaris server when a Dell NT server was $5,000. That’s where I made my mistake.’ ” —“The Hidden Cost Of NT”^w68

    “Net-Temps experienced three months of downtime on its NT Server before giving up on theplatform. ‘We have 40,000 people a day accessing our site, and NT was down weekly,’ says Strange. ‘If a video card went out, we lost the system. A cable would go out, and the server would crash.’ Net-Temps estimates it lost $15,000 every hour that job seekers couldn’t get through. ‘I can’t even compute the costs when my customers—recruitment firms—can’t get through,’ he says. While Strange continues to evaluate NT for system enhancements, he says today’s NT isn't any closer to the functionality of Sun’s Solaris, which Net-Temps moved to.” —“The Hidden Cost Of NT”^w69

free operating systems

     An obvious question raised by the free UNIXs (FreeBSD, LINUX, NetBSD, OpenBSD) is “are they any good?” The answer is “yes!” These four operating systems are maintained by literally thousands of volunteers, many of whom have paid jobs working on the commercial OSs. John Kirch: “Why Windows NT Server 4.0 continues to exist in the enterprise would be a topic appropriate for an investigative report in the field of psychology or marketing, not an article on information technology. Technically, Windows NT Server 4.0 is no match for any UNIX operating system, not even the non-commercial BSDs or Linux.”^w22

     “For the most cost-conscious customer, Linux, FreeBSD, NetBSD, or OpenBSD would be the obvious choices. They cost nothing, yet they are just as stable and offer as much functionality as, if not more than, the commercial UNIX operating systems.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

     “Since these operating systems are free for use even in commercial environments, many ISPs run on Linux or FreeBSD. NetBSD will run on practically anything: DEC Alpha, Motorola 68k (Amiga, Atari, Mac, MVME, Sharp, Sun3), PowerPC, Intel, DEC VAX, Acorn RISC, MIPS (Sony NEWS, DECstation), etc. OpenBSD’s primary focus is on correctness and security. Linux is the most popular and will run on a wide range hardware: Sun, Intel, DEC Alpha, PowerPC, PowerMac, etc. Paul Krill’s recent articles in InfoWorld (Linux picking up steam and Linux supporters rally around freeware OS) focus on the ever increasing support of major vendors and future plans for added functionality, i.e. support for Intel’s 64-bit Merced processor. Currently, Linux is perhaps the fastest growing operating system on the market. For more information, see Linux Resources or Red Hat Software.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

     “Tim Payne, director of database marketing at Oracle, says many of his company’s corporate customers have made large investments in Linux. When Oracle announced in July [1998] that it would be offering 24x7 support for Oracle8 on Linux, he says 300 customers called the next day asking about availability. ‘It’s reliable, it’s proven, it runs on commodity Intel boxes, and it’s a really low-cost alternative to NT,’ says Payne. ‘The fact that you are going to be able to get enterprise quality support from Oracle to deploy on the Linux platform will help customers adopt Linux.’ ” —Ann Harrison, “In LINUX We…”, Software Magazine, Cover Story, September 1998^w51

    There are also free single user hobbyist licenses for several commercial operating systems. These include: OpenVMS/VAX^e85, Solaris^e85, and SCO^e85.

total cost of ownership

    There are a number of factors involved in determining total cost of ownership beyond mere initial purchase price.

    “Most managers will agree that the mere cost of an operating system is trivial when looking at the big picture.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

    “Most technology committees concentrate their budget and planning efforts on the acquisition of next-generation software and hardware. But hardware and software costs represent a small fraction of the total expense of networked computers. Accordingly, this focus overlooks the most important factors driving the rising costs of law firm computer systems. The neglected costs are management and labor expense.” — Kingsley Martin^w29

    One of the key considerations for many small businesses when they choose a network operating system is the economics of the OS. Those picking a server OS should consider several cost-related factors, not just the cost of the operating system itself, says Dale Cosgro, the Santa Cruz Operation’s (Scotts Valley, CA) product manager for small and medium businesses.
    In addition to cost, other factors include the type of applications a business uses, reliability, scaleability, maintainability and support, and security.
     “There are two ways to look at costs: the costs per component and costs for a total solution,” Cosgro explains. “One of the things that make NT attractive is that it appears to be a low-cost system. In fact, it’s more costly in total cost of ownership” than UNIX, especially SCO’s $1,399 OpenServer version of UNIX, Cosgro believes. — Jim Carr; MicroTimes^m1

     “NT is often chosen for budget reasons since many customers are not willing to pay for the more expensive hardware required by most commercial flavors of UNIX. More important, however, is the overall cost of implementation which includes system administration along with several other factors like downtime, telephone support calls, loss of data due to unreliability, etc.” —“Microsoft Windows NT Server 4.0 versus UNIX”^w51

     “Tippett Studio uses Silicon Graphics Irix servers. Despite the high upfront costs of these machines, they’re more affordable than NT servers when support requirements are factored in, says Jeff Stringer, IS manager for Tippett. ‘NT’s not a true multiuser system,’ adds Stringer. ‘To adjust a file, I’d have to send someone to each desktop to shut them down while work commences on the server.’ With the Irix systems, system administration chores can be conducted while the servers continue to process graphics files.” —“The Hidden Cost Of NT”^w69

additional items

    An important consideration is what has to be added to the basic package to make it useable. In the classic desktop model, consider that the initial purchase price of all application software combined is typically two to three times the initial purchase price of the computer hardware itself.

     Even with hardware, consider the difference in approach between Wintel (Windows OS on Intel hardware) and Macintosh computers. Often the initial purchase price of a Macintosh is greater than that of a Wintel computer with comparable processing power, but the Macintosh comes with SCSI (or FireWire), ADB (or USB), ASC (CD-quality sound in and out), and other basic hardware that has to be purchased and installed onto the stripped down Wintel machine (some high end Wintel clone makers pre-package these components). When purchased separately, the cost is often much greater than the kinds of volume discounts a manufacturer can pass on by including them on every computer.

     “Most managers will agree that the mere cost of an operating system is trivial when looking at the big picture. Although Windows NT Server 4.0 can be more expensive than some commercial UNIX operating systems (NT 4.0 Server five-User version - $809; 10-User version $1129; Windows NT Server, Enterprise Edition 4.0 25-User Version - $3,999; Enterprise Edition 4.0 50-User Version - $4,799; NT Server 4.0 Documentation Kit - $69.95; Source: Microsoft), it can be had for trivial amounts at trade shows. What is not trivial, however, is that a networked operating system in this price range should ship without a telnet server, SMTP server (e-mail), disk quotas, news server, or at least a DNS server that works to customers’ satisfaction (many NT administrators feel compelled to go with third party DNS solutions). In order to match the functionality of a BSDi installation, additional Microsoft products and third-party solutions would bring the final price of a comparable NT solution to around $4,000, according to BSDi. Maggie Biggs, a senior analyst in the InfoWorld who specializes in database technology and application design, development, and deployment via intranets and other networks, estimates a price of $4,636 for a comparable Windows NT 4.0 solution in her article which compares NT 4.0 to Red Hat’s commercial Linux (for only $49.95). Here one sees that successful marketing can often distract customers from considering their need for functionality.”—John Kirsch^w22

operating costs

    “A widely accepted measure of computer expense is the total cost of ownership (TCO) model proposed by the Gartner Group. This standard analyzes all costs associated with computer ownership over the lifespan of the equipment. Costs are divided into direct and indirect expense. Direct, or budgeted expense, comprises hardware, software, operations management, labor, development and communications fees. Indirect, or unplanned costs, comprise peer support, casual learning and productivity losses caused by “downtime.” A recent study by the software giant Microsoft and Interpose, a software developer specializing in TCO tools, proposed a cost breakdown of PC ownership (See “Cost of Ownership,” Page 42). This analysis projects hardware and software expense as one-fifth of the technology budget (excluding unplanned expenses). The study also compared a number of hardware alternatives and proposed the following cost comparisons:” — Kingsley Martin^w29

lowest cost per year is best

DOS	$8,980		Windows 3.1	$7,251
Windows 95	$6,530		Windows NT	$6,516
Macintosh	$5,075		UNIX	$12,973

see full article at: Total Asset Administration ^w29

training

     A huge hidden cost is training personnnel on a new computer, operating system, or software application. This is where the ease of use of the Macintosh really shows up. Because Apple strictly enforced a standardized graphic user interface (poorly imitated in Windows), the knowledge that a user gains of one program can be applied to immediately be productive in a new program. With the Macintosh, typical self-training times are around one to four hours per new software application. In contrast, on Windows, training time in a classroom typically ranges from one day to two weeks per new program (or major update).

     “Tippett Studio, the company responsible for the graphics in Starship Trooper, which received an Oscar nomination for Best Special Effects, uses 130 SGI (Silicon Graphics, Inc.) machines running IRIX, SGI’s very own UNIX operating system. Tippett’s studio operations manager explains why they use SGI with IRIX instead of an NT solution:^w51

    “ ‘SGIs are cheap for what they do,’ says Tippett’s Jeff Stringer, the studio’s operations manager. ‘The cost of maintaining an NT system is pretty high when you think of all the system administrators you have to hire.’ ”^w51

    “Hiring is an especially big concern for the small studio. Unlike the super-studios, Tippett — which designed the bugs that threaten humanity in ‘Starship Troopers’ — is an f/x boutique.”^w51

    —Greg Lindsay, Oscar Tech, The Netly News, 27 February 1998.”^w51

     “Running automated tasks is only useful when the scripts/tasks/executables can be run without human intervention. So much that runs on NT is GUI-based, and thus, requires interaction with a human administrator. If seen realistically, the types of automated tasks that are being run in most shops are site-specific routines that have to be programmed by system administrators. Based on my own industry experience, it is a rare site indeed where Perl is installed on NT servers and there is any NT administrator who knows the first thing about Perl. The driving force behind buying cheap hardware goes hand-in-hand with the hiring practice of selecting the cheapest NT administrators available; after all, it’s NT, all you have to do is point and click!” —John Kirsch, “Microsoft Windows NT Server 4.0 versus UNIX”^w51

maintenance

    In computer systems, the cost of maintaining the system is always much greater than initial purchase price. Anyone who realizes this will then realize that the really big savings in a running a computer system are gained through lowering long term maintenance costs. This is where paying a bit more for well-built hardware will really pay off, as on average, the computers will last longer and require fewer repairs. This also touches on reliability, plug and play, and ease of use.

     The total cost of ownership of an operating system must include not only the costs if the OS itself, Dale Cosgro, the Santa Cruz Operation’s (Scotts Valley, CA) product manager for small and medium businesses, says, but the long-term maintenance and support of that system. With NT “There are more hidden costs” than with UNIX, according to Cosgro.
     These include hiring and paying personnel to support Windows NT, which is less stable an operating environment than UNIX. While Microsoft might argue this point — that UNIX is less prone to system crashes, and thus requires less in day-to-day maintenance than NT — users of both systems generally agree with Cosgro. — Jim Carr; MicroTimes^m1

     The magazine The New Yorker has [had] its entire operation—editorial and business—on a Macintosh network … [since] 1990 when Pamela Older joined the organization as Senior Vice President of Operations. “The savings in production, typesetting, and layout and in the imaging center are in excess of $4 million a year. Macintosh is an investment that has paid back royally.”^e47

     OS/2 Warp: “manageability that can significantly reduce cost of ownership”^w27

    “Downtime Costs The cost of downtime, in qualitative measures such as customer service or quantitative measures such as missed orders, is becoming a crucial issue to even the smallest companies as they move into the world of E-business. Users can add servers as applications grow and transactions become critical, but that doesn’t address availability and systems-management issues, says Dick Sullivan, [VP of NT solutions for IBM’s server business unit]. ‘Even the small organization can’t tolerate a 97% availability rate for E-business,’ he adds.” —“The Hidden Cost Of NT”^w70

productivity

    Another important factor to consider in total cost of ownership is the productivity of workers on various platforms.

     OS/2 Warp: “real multitasking for greater productivity”^w27

cost/benefit analysis

    I am looking for good references (URLs, articles, books, etc.) on the issues of total cost of ownership and cost/benefit ratio. Please forward any useful information to Milo.

    A web site on dozens of operating systems simply can’t be maintained by one person. This is a cooperative effort. If you spot an error in fact, grammar, syntax, or spelling, or a broken link, or have additional information, commentary, or constructive criticism, please e-mail Milo. If you have any extra copies of docs, manuals, or other materials that can assist in accuracy and completeness, please send them to Milo, PO Box 1361, Tustin, CA, USA, 92781.

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    This web site handcrafted on Macintosh computers using Tom Bender’s Tex-Edit Plus and served using FreeBSD .

    Copyright © 1998, 1999, 2000, 2001 Milo

    Last Updated: August 9, 2001

    Created: June 4, 1998

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