On October 12, the Giga Group released the results of its total cost of ownership (TCO) study, which comes down in favor of Windows 2000 (Win2K). These results mark the latest development in the analyst vs. analyst war over the TCO of Win2K. The report concludes that Win2K migration, while expensive, will pay for itself in about a year, as long as businesses commit the necessary IT resources, including adequate MCSE training, to the upgrade. This report is in direct contradiction to The Gartner Group’s much-touted TCO study, which pronounced Win2K economically unattractive. The concept of TCO, which Gartner invented, attempts to estimate how much of a company’s financial resources the organization will consume by incorporating a certain piece of technology. The TCO of Win2K, for example, includes not only the price tag of the software, but also the cost of necessary hardware upgrades, the value of the time that network administrators must spend to install and maintain the software, and the price of retraining all computer users to use Win2K. The Giga Group uses slightly different terminology and labels its report a Total Economic Impact (TEI) analysis, rather than a TCO analysis. The Giga Group's name difference reflects its estimates that Win2K's benefits will outweigh the cost of migrating to Win2K. According to the Giga Group's announcement, “The TEI analysis shows that the benefits of gaining a rock-solid desktop platform, a cross-enterprise common desktop interface which makes user support less costly, and having at least two years of not having to worry about another hardware upgrade are significant.” Last month, Gartner released its TCO study, which concluded that Win2K is not an economically worthwhile proposition. Microsoft immediately returned fire with an analytical report by Arthur Andersen, which concludes that Win2K is economically viable. Of course, many users have reacted with skepticism to the pro-Win2K Andersen report because Microsoft commissioned and funded the report. For more information about Gartner's and Andersen's reports, see Kathy Ivens' news story "Analyzing TCO as an Industry Tool" and my news story "Analysts Dispute the True Cost of Windows 2000." The Giga Group is well respected and is entirely independent of Microsoft. When I spoke with Laura DiDio, a Giga Group analyst, she discussed the difference between Giga Group’s TEI methodology and Gartner’s TCO analysis. “\[Gartner Group\] just added up the numbers,” said DiDio. “They didn’t tie them to underlying concerns. That’s where we took umbrage with Gartner. The TCO numbers didn't take into account natural upgrade cycles for Y2K. They didn’t take into account the general benefits of \[Win2K\]. We’re bringing it into context.” DiDio warned that IT professionals shouldn't take the Giga Group’s pro-Win2K conclusion as saying that Win2K is inexpensive. She emphasized the high price of training network administrators to use Win2K. “The learning curve is steep to the point of being vertical,” said DiDio. “MMC is incredibly complex for first- time users. You can’t underestimate this beast.” But, she concluded, “Once you get past the learning curve… the benefit will be worth it.” The study is not available as a standalone report, but is made available only to Giga Group clients.
