On the XO Laptop

TOC: Total Ownership Of Cost, the Cost of Microsoft Software

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[First published as TOC: Total Ownership Cost on November 21, 2007.]

A few years back, about the time free and open-source software was first deployed by large enterprises in a serious way, some of the commercial software vendors, led by Microsoft, launched a counter-attack that went along these lines:

  • Yes, free and open-source software doesn’t cost anything, but you have to consider TCO, the Total Cost of Ownership.
  • TCO includes the cost of installing the software.
  • TCO includes the cost of training someone how to use the software.
  • TCO includes the cost of support and service.
  • (Said in a soft voice) TCO includes the cost of shipping much of your IT budget to Redmond, Washington.

The thrust of their argument was there are so many costs involved in installing, maintaining, and supporting software, that the initial cost is not that important. Why shouldn’t you — or your company — pay a few hundred bucks per employee for a copy of Windows and the basic Office stuff?

I haven’t heard many TCO-based arguments lately. That’s because all of the following forces have been at work:

  • The relentless application of Moore’s law, so that good computers can now be had for under $200, and disk storage is essentially free ($300’/terabyte);
  • The constant improvement of Linux, so much so that new enterprise-level versions of the kernel come out every few months;
  • The increasing quality of information available on the web, what some call “Support by Google.”
  • Increasing awareness and writing about free and open-source software, particularly in the blogosphere.

Many of these points are well-known. However, I don’t think most people appreciate the high level of support that can be obtained if you run Ubuntu and thus have access to its outstanding community, and also take the time to search the web. I wrote many posts this past July and August, including the building of two computers from parts, to show by direct example the kind of detailed reports that make “Support by Google” possible.

Re the $200 computer, see the following:

The net of all this:

  • A complete laptop — the OLPC XO — can now be obtained for $200. This includes a complete operating environment based on free and open-source software;
  • Not counting the hardware cost, the cost of Windows and Office is at least $200, and you have to pay for many of the applications, too.

Simply put, if you aren’t using open-source then the minimal software cost exceeds the cost of a complete computer based in Linux and open-source.

Microsoft will be further challenged as the cost of the hardware drops even more. This is one of the reasons I have been encouraging folks to buy an XO, as this will fuel the relentless reduction in cost that will occur once serious production begins. As I have noted in an earlier post, I have commited to buying four XO’s, and my posts have resulted in four more being ordered.

My own guess is that it won’t be too long before some folks make a counter-argument against TCO. Indeed, now might be a good time to start:

Hardware has grown so cheap, and the cost of Microsoft software has remained so high, that the cost to acquire the Microsoft software is the dominant factor in the total cost. TCO has become TOC: Total Ownership Cost, the cost of owning Microsoft software.


Written by daveshields

December 12, 2007 at 5:28 am

Posted in xo-laptop

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