Will thin clients need fat wallets?

Research house Ovum's report on Total Cost of Ownership (TCO) says users are ignoring network costs. Users disagree. They claim the network costs are not hidden costs, but always taken into account.

Of all the hidden costs, higher network costs are by far the mosts users are ignoring network costs. Users disagree. They claim the network costs are not hidden costs, but always taken into account. serious concern to users," was research house Ovum's conclusion on Total Cost of Ownership (TCO) as the market moves towards thin clients.

This was part of a report it released last week entitled Network Computers: Risks and Rewards for Business, (Network News, 22 October). Yet, users disagree with this statement, claiming it is inaccurate and false.

Ovum's report highlights that network costs are set to accelerate as the market shifts away from PCs to centrally administered thin clients.

Half of the companies interviewed, Ovum claims, believed that they would have to invest substantially in additional bandwidth to accommodate centralised applications.

Jean Leston, senior consultant at Ovum, said: "The back-end costs are the hidden costs and this involves the network.

"There will be a natural move to ISDN and ATM lines as end users will require high-quality bandwidth. Network downtime has to be considered along with maintenance tests."

She added: "More money will be needed for network redesigns including new routers and switches. The rewiring of office space is another cost factor."

Leston was backed up by joint author of the report Katy Ring, senior consultant at Ovum. She said: "These costs are never mentioned by IT managers or analysts, who also exclude these costs.

"The network is key to network-centric computing, which is where the market is moving towards. With a thin client infrastructure, I wonder whether big companies are recognising this as a big issue, and taking into consideration the network."

Ring added: "Additional network requirements costs organisations: the need to install better lines, ATM or ISDN, and Wan costs with thin client servers."

In the report, Ovum outlined six key areas of the network which will cost more:

1 higher costs from Internet service providers to secure more bandwidth due to the centralisation of mission-critical applications;

2 higher costs to lease and install more ISDN or ATM lines;

3 more network downtime in order to administer centralised upgrades and maintenance tasks;

4 additional investment in routers and switches;

5 extra resources to reappraise and change the network infrastructure - for example, redesigning Wans; and

6 possible requirements for new office space with improved wiring for network use.

Andrew Tidd, IT manager at global freight company Panalpina, strongly disagrees - even though the report was based on 70 IT managers in the top blue chip companies.

He said: "I disagree with the Ovum report. We have just installed a new IT infrastructure using 200 thin clients worldwide, 120 in the UK running on IBM RS/6000 machines through Cisco routers.

"Most big companies have a networking infrastructure in place; most have routers to access servers, and hubs for UTP structured cabling. That cost of the network will always be there, regardless of whether they switch to thin clients or PCs."

Tidd added: "In our view, running a worldwide company you have to have this kind of connectivity - most companies have to invest in network equipment anyway. Therefore, it's not really a hidden cost.

"Companies have already invested in it. With regards to bandwidth, which is Ovum's main argument for hidden network costs, with thin clients not that much bandwidth is needed. A local 10BaseT Ethernet line is adequate and can run around 500 users."

Jim Bottome, IT manager at tobacco firm, BAT Industries, also disagreed with the TCO results in Ovum's report.

He said: "We looked at bandwidth as part of our analysis and one or two of our sites have ATM. But, we considered the network and support costs, taking into account the cost of routers, switches, and new servers." Bottome pointed out, therefore, that it's not entirely a hidden cost.

Ironically, freight company, Panalpina was the token user at Ovum's press briefing to illustrate the findings of the report. It, surely, couldn't have contributed to the findings, but definitely added to the accuracy of the report, which needs further clarification and detail. NN