What a Vista Upgrade Will Really Cost You

narramissic writes, "James Gaskin wrote an interesting article this week about what he recons it will really cost organizations to upgrade to Vista. Gaskin estimates that each Vista user will 'cost your company between $3,250 and $5,000. That's each and every Vista user. Money will go to Microsoft for Vista and Office 2007, to hardware vendors for new PCs and components, and possibly a few bucks to Apple for those users jumping to a Mac.'" Any sense of how realistic those figures are?

Higher Ed

[Anonymous Coward]

I work at a University. A rather small private one. We use Dells on the desktop and in the server room. Most of the desktops we've bought in the last year will be able to run Vista. We bought them with that in mind. That said, we get Edu pricing from Dell and from MS. The users with the newer machines will be able to run Vista. The older machines will be replaced as they go out of support. It'll cost us about $1300-$1400 a machine to replace them. I don't know how much Vista will cost us, but I doubt we'll pay "full price".

One of the few good things about working for a school. Edu Pricing. :-)

Re:Huh?

[gEvil (beta)]

Honestly, I do have to give Microsoft a bit of marketing credit for using years in their product names. When machines were refreshed around my office last year, a coworker of mine started hemming and hawing about how he needed an update to Office 2000, because it was 5 years old. The thing is, he has absolutely no problem using the other programs that he does that are 5 years old and 2 versions out of date. He doesn't think of it in terms of "I'm using version 5 when version 7 is out there." But he does notice that he's using Office 2000 in the year 2006...

This is FUD

[kahei]

New PCs will cost $1,500-$2,000. Darn few existing corporate PCs will have the video horsepower needed to run Aero, Vista's primary upgrade inducement. You need 256MB of video RAM to run Aero properly, no matter what Microsoft's marketing says. I don't know of any motherboard-based video chip sets that include 256MB of RAM. Upgrade? While in the PC, add memory: Vista needs a minimum of 1GB of RAM. The hardware cost of the RAM may be less than your labor costs getting that installed in every PC. If your exiting PCs can take full advantage of Vista, I'm happy for you. I don't believe you, but I hope your upgrade goes well.

Now, Vista is a trainwreck, but unless there is some gigantic inexplicable performance disaster between current versions and the released build, the above is very much in the 'obvious fabricated attention-grabbing FUD' area of truthiness. Given that Vista works fine without with 128Mb video RAM and 512Mb system RAM, the argument above boils down to 'Hi guys, I need hits on my articles so I'm going to make preposterous claims and get linked to!'

If I were spreading Vista FUD, I'd focus on the much more difficult question of 'what will it actually do for you? Specifically, what does it do that Win2k doesn't?' Sadly, the main answer is 'Well, Microsoft will make sure that new stuff doesn't run on Win2k'.

Re:heh

[TykeClone]

I've got two or three applications that are the drivers for hardware upgrades. Unsurprisingly, one application is a tax package - the issue is code bloat, but I'm not sure if it's in the software or in the tax code :)

Because we need to keep a number of machines fairly current, I can spread around the older machines to places where they are useful two or three times until they are either no longer useful or have been supplanted by something better.

For the record, I've still got some PII-233 machines out and about - I don't believe in upgrading for the sake of upgrading!

Completely inaccurate

[RingDev]

The guy is working the numbers in ways that no competent IT Manager would ever attempt.

Why $3,250-$5,000? Here's my calculation.

And here is why he is wrong:

New PCs will cost $1,500-$2,000.

• A solid IT Manager will have a PC replacement plan. The organization will be buying new PCs anyways, this cost is not specifically for Vista
  
• A New Dell workstation (high end, but not top end) with Windows XP and Office XP can be had for about $1000 at volume. Just PC with Windows XP for around $700.
  

Darn few existing corporate PCs will have the video horsepower needed to run Aero, Vista's primary upgrade inducement.

• Actually Aero can be turned off and you can run Vista on any machine that will run XP. And 'graphical coolness' is hardly the primary reason to upgrade.
  

Depending on your volume purchasing agreements, new copies of Vista and Office will total between $750 and $1,000. After all, your company always buys the "professional" packages, right? And they have to be installed, right? If you're getting a much cheaper quote on both packages installed and tested, let me know.

• As previously stated, both come pre-installed on new purchased machines. If you want to upgrade all of your users to the latest version of office standard you are looking at about $350/license at volume.

The real value of Vista and Office 2007 includes new collaboration services. This means new back end servers. Most estimates place the back end support cost at $2,000 per user, but I used a range of $1,000-$2,000 for my calculations. Why get Office 2007 if not new SharePoint and Exchange servers? Can you run both on one box? Didn't think so.

• This statement completely ignores economies of scale. If you have 3 employees, sure, it might cost you $3k+/user for back end software, hardware, and support. But if you have 500 employees, it'll cost you more like $5/user.

The items the guy completely missed is training costs, deployment costs, and business process changes. Those will wind up costing the organization just as much, if not more than the licensing costs. The cost IS higher than licensing alone, but not to the extent that this guy claims, nor for the reasons he expects.

-Rick

Re:Try Telling That to the Coders

[rjstanford]

Of course, the average cost of a good developer, total to the company, is around $60-90 per hour. That's $500-750 per day. If having the latest hardware around makes them even slightly more productive, or gives them a reason to work an extra hour per week (not day, week), that pays for a new, kick-ass system every six months or so -- and that's assuming that you just shred the old hardware.

Re:heh, what were they doing

[spectral]

Those days are long gone? I guess that explains why products such as Incredibuild aren't popular, and why visual studio needs the ultra-mega-expensive edition just to parallelize building projects in a solution between your multiple cores. Oh wait.

I work on a mid-sized C++ project where the build times are approximately 30-40 minutes. I can finish a can of dew in that time, easily. Incredibuild has drastically reduced that time to about 6 minutes.

Note: I don't work for Incredibuild, just am a customer who is sually happy/satisfied.

Re:Yup.® FUD

[tmasssey]

So you pay, at a minimum, $600 for that copy of Office. The only way that SA would cost you less is if you upgrade Office every 2 years or less. And exactly how much money would you spend to stay on *that* upgrade treadmill? Why would you even *want* to do that, even if the software were "free"?

Re:Try Telling That to the Coders

[smithbp]

Vista seems to do that to a bunch of people. I downloaded it when they released the beta to the public a few months ago. It proceeded to set my system clock 40 years ahead, rendering the Vista install worthless and unable to be accessed. I deleted that partition and went to Ubuntu because of my disgust with the M$ response. Their answer was basically, "Bummer, it's a beta." I had changed the clock back through the bios, but once the licensure for the beta had "expired" according to the system, there was nothing I could do with it. I have been a happy ubuntu camper ever since. The only thing Ubuntu can't do that my Windows instances could is view newer flash sites. My wife was skeptical at first, as she didn't see all of the clutter that was once there in Windows and couldn't immediately find her files. She quickly warmed to it and doesn't have any desire to use Windows now. It is a simple OS that the average user wouldn't be able to differentiate between.

Re:FUD

[UncleRage]

Not exactly true.

Many small to medium size companies choose not to lease or buy "Big Brand"; meaning, you don't always get a new Windows COA on a piece of hardware.

I just finished a new business install w/ a dual xeon server and 6 workstations. My build estimate was substantially lower than Dell and landed the job. (Specifically, my server build was lower than Dell by nearly $800 for the same hardware -- neither of us providing Win2k3 SBS. The workstations, also beating Dell by nearly $200 per box, all used recycled Win 2k Pros -- COA's pulled from retail, not OEM, licenesed systems that the client provided from their last business).

End nut? New hardware that did not come packaged with new Windows.

Had the client been forced to buy new licenses for the workstations (and not recycle existing, valid, licenses), the cost would have been an extra $870 for OEM XP Pro's.

Now, the client has a rock solid workstation using an OS that is already proven with their OS/Software choice. And they are thrilled.

Any reason to move forward to XP (with another OS migration in the next 1-2 years)? No.

Would the migration to Vista have cost this client more if they had chosen big built OEM? Absolutely, especially when one considers the cost of the new equipment (Microsoft Tax included), and then a secondary migration to Vista a year down the road.

Remember, not everyone leases with a dollar buyout to ride the write off. There are many businesses that are working on a small(er) budget that will definately pay more for the transition.

The nitpicking line is now open... fire away.

Exactly

[ACMENEWSLLC]

>>Aero is not required on corporate PCs so scratch the video upgrade. We deployed Windows XP with the dummied-down Windows 2000 interface and expect to do the same with Vista. We do allow users to change to the Fisher-Price UI if they like, though.

>>Corporate customers don't pay between $750 and $1k for Office - our enterprise licensing for Microsoft products (which includes the OS, Office Professional and Server and Exchange CALs) runs about $200 per PC per year.

Exactly right. Our first XP PRO PC was a Pentium 200MHZ, which ran XP PRO just fine with all the UI bells turned off. All it needed was extra memory to be usefull. This was my PC.

Prior to installing XP, we bought XP and used the backrev agreement to install NT4. When Vista comes out, we will do the same. We will purchase PC's with VISTA, but install XP. Eventually, once all our software works with Vista, we will roll it out to everyone. By that time, half the PC's will have VISTA ready hardware anyway and the others will run it without Aero.

Re:FUD

[networkBoy]

A large part of our workforce is mobile.
We are in the semiconductor industry, and while your wanting sales and MarCom to have notebooks is obvious, I'll agree the rest is not so obvious:

Techs: Notebooks allow them to have their computer no matter where they are (in a lab, at their desk, in the cafe, checking e-mail over breakfast, etc.) What I've noticed is that most of the techs desks are now empty. They've set up shop in the lab and basically live there. Since labs are up to 3 buildings away from peoples desks, this means a lot of time not wasted.

Engineers: Go ahead and basically ditto techs, while silicon is in-house. While in the design phase, this allows teams working on the same functional block to all huddle in a conference room and work as a team (granted an open office plan could allow this as well, but then you'd be moving people's desks around as their team assignments changed).

Managers:
Damned if I know, all they seem to do is power point and show each other their power point foo in meetings. A thumb drive and bullpen PC on the projector would work fine, but then again, they usually work from the Cafe and/or home.

Legal:
Stickiest situation. Notebooks are better for security for a non tech savy user. They have hardened locking cabinets that their notebooks are locked into at night. While a removable HDD would do, these are lawyers, not techs.

HR: Ditto legal.

It all sums up to increased time availability &&|| security. All notebooks use IBMs TCPA chip to run the HDD in an encrypted session, so little chance of a stolen book being an issue for us.
-nB

Re:Exactly...

[jcluthe]

No way he's going to be able to do that and still make money. Sure DELL & HP cost a little more, but when things go wrong, I have someone to yell at. I have been buying DELL, Apple, HP, & SUN for a major organization for about 10 years. I spend a lot of money and I am often asked by my users, "Why not just get a board from Tiger, and RAM from crucial, etc....." and I always have to argue the warranty. But, these same users that think they are going to save money are the first ones to come to me and say "Its broke, what do we do now." I have had all three of these vendors out to do repairs, and they always do a great job and they always have the parts they need - never an issue. i have evne called DELL and said "I'm sick of messing with this machine, your techs have been out twice, give me a new PC." They not only give me a new PC, but a lot of times it has been a newer model at now extra charge. OK, I'm off of my soap box now!

If you would have started three years ago...

[HangingChad]

...moving your key production applications to web-based alternatives, standardizing on FireFox and Thunderbird for web browsing and email, and getting people comfortable with OpenOffice by handing out disks for everyone in the company to take home and play with then today you could laugh at Vista upgrade costs because you could use any client OS you wanted.

Some companies have actually been doing that and now it's paying off.

I believe his calculations are going to prove pretty close to on target. If they're over it won't be by much. I use the following rule of thumb guide for hardware/software upgrades/refresh:

1. If the estimate comes from MSFT, double it.
2. If the estimate comes from one of the Big 5, raise it by 45-50%
3. If the estimate comes from a MSFT Solution Provider, add 40%
4. If you're doing a MSFT upgrade yourself with all internal labor, add 35%.

Not everything is about technology people!

[WebCowboy]

When the dot bomb happened and we pushed to a 4 year cycle support costs in that last year were dramatically higher than the other years. The knee in the curve appeared to happen at 3 years 3 months (quaterly mapping).

Doesn't anyone know the WHOLE reason why the TCO of computer infrastructure rises after three years? Don't ANY accountants read /.?

The TCO of computer hardware includes "depreciation expense". The government allows a certain percentage of your fixed assets to be written off for tax purposes. I'm not sure of the terminology in other countries, but the maximum permissible depreciation allowable for taxation purposes in Canada is called the "Capital Cost Allowance". In the case of computers it has been a linear depreciation of about %30 of the original cost. That means your computer is "written off" in about three years. I believe the US has a similar allowance for depreciation expense on computer hardware.

This has more of an effect in the US IIRC, becasue in Canada, if a business does not claim the full allowance (for example, if it is not required to bring net tax to zero), the unused portion PLUS the normal maximum CCA is allowed as a deduction. (I THINK) in the US businesses CANNOT accumulate unused but allowed depreciation expense in future tax years so a business tends to make sure to write off the largest amount possible. This means that in each of the first three years of a PCs life a business could save hundres in taxes from this deduction.

After three years PCs are essentially WORTHLESS assets--they contribute exactly ZERO dollars to the asset portion of the balance sheet, and yet they continue to incur maintenance expenses so they would probably have a noticeably larger negative effect on the balance sheet if there are a lot of old PCs in a busines. Furthermore there aren't many warranties on PCs that go past a year much less three years so if there is a problem a business must bear the full cost of repairs--on an asset worth $0.

Realistically a company could get SOME money from the sale of three year old PCs, and even three year old laptops could be prefectly usable and capable of running five-year-old XP and any contemporary application software. From my practical experience, aside from hardware failiure a machine that is 3 or 4 years old is no more trouble to support than a new machine--WinXP still costst the same for both, it still buggers up just as much on new machines as old, 3 year old machines in an office environment are not all that slow so it doesn't take any meaningfully longer time to perform various tasks and if things are really fouled up both new and older machines have the same reimaging process. Aside from replacing hard drives, however, most hardware upgrades become more expensive over time, when warranties expire and models are discontinued.

I'm not an accountant (as is probably evident from my post--I'm just waiting for a real accountant to pick it apart) but wherever I've worked it becomes instantly and magically easier to justify replacement of a workstation desktop or notebook the moment it becomes three years old, and in the vast majority of cases there was no similar magic jump in maintenance costs. We had scads of flimsy, cruddy Dell C600/610s that were already expensive in terms of hardware replacement costs well before the three year time limit, but it was only at the three year point where the bean counters on high would finally say "yeah, it's crap...put an order in for a new one". I cannot say EXACTLY how much or what kind of a positive effect it has on the financial bottom line, but once accounting has fully written off a PC their tone changes dramaticaly and they are almost eager for you to upgrade--slightest little issue (especially with hardware) will justify an upgrade to a whole new machine.

ANyways, I'm sure that because of this behaviour, it could be almost a full three years before we significantly move from XP to Vista. All incoming PCs will be imaged with WinXP for t

Math and reality suck when you are a whiner!

[metoc]

Here is the reality.

All PCs eventually get lifecycled, and all new PC's come with a copy of Windows (Vista starting next year) whether you like it or not. Worst case you have to upgrade from Home to Professional versions at purchase time. If you want to use your existing PC, then just pay the upgrade fee. Unless your hardware is old, it will probably run Vista with a minor memory upgrade. If your hardware is old, buy a new Vista ready PC.

Vista needs more powerful hardware. So? Once upon a time a new PC had a 286 processor and less than a 1MB of memory. By christmas most PC's will be Vista ready. If you really want the full Aero experience, upgrade the video card when you buy the PC.

Office 2007. If you already have a version of office... upgrade! Why would you buy new? If you don't have Office now, then you don't need Office 2007.

Finally. Why do you need Vista & Office 2007? For most of us XP & Office (XP or 2003) is good enough for now. Do you need Vista & Office 2007 or want Vista & Office 2007? If you are an early adopter, then its the price you pay.

Short of it. If you have never owned a PC, the cost of buying a Vista ready PC with Office 2007 is probably going to be steep. As you have no legacy requirements (how could you if you have never owned a PC?) then think Linux or Mac. Otherwise you are buying into the perpetual M$ upgrade program with both eyes open, so don't complain. If you do own a Windows PC with Office, then you are already in the loop, so upgrading is the cost of doing business.