TCO Continues to Drop:

How Server-Based Computing with Thin Clients Cuts the Total Cost of Ownership

A typical migration to server-based computing (SBC) with thin clients can now cut the over-all costs of an IT infrastructure by up to 70%.
Modern server environments and universally deployable thin clients can increase these savings even more.

Thin client computing has proven its worth: User applications and data storage are both concentrated in a data center. Data backups as well as management of servers and applications are carried out in a centralized and automated manner. At the same time, configuration and maintenance of the end-user devices can be fully achieved remotely. In contrast, those operating a PC-based network distribute their computing capacity across all workstations, thus having to cope with the resulting high costs of support, security and maintenance. A clear indication of the growing criticism of the PC cost spiral was the resistance of companies to upgrade to Windows® Vista as a desktop operating system because it, like every new Windows® release, would require yet another round of high investment in support-intensive PC hardware. In fact, in a survey of CIOs by the market research company Forrester, 20% of those asked expressed a desire to delay a Vista® upgrade by two years. By comparison, the thin client sector has experienced continued growth since the end of the 1990‘s. According to IDC, approximately 3.5 million of such devices were sold worldwide in 2008; the top sales markets in Europe were the UK and Germany.

To make a comprehensive cost comparison between PC-based and thin client environments, all expenses associated with the investment and operation of each infrastructure must be taken into account. This amount is the total cost of ownership (TCO). A correspondingly detailed economic analysis has been conducted by the Fraunhofer Institute for Environmental, Safety and Energy Technology (UMSICHT)1: This thorough analysis clearly reveals the economic impact that the three different operating models examined – Unmanaged PC, Managed PC and Thin Client – have on the IT cost structure of a typical enterprise employing between 150 and 300 people. While a PC that is only manually maintained results in an annual TCO of about 4,600 euros, the introduction of a software distribution system decreases this amount to about 2,800 euros - assuming at least 150 workstations are involved. However, with an annual TCO of less than 1,500 euros a thin client workstation is even 46% more economical. Compared directly to a manually managed PC, the thin client saves up to 70% (see Fig. 1). According to Fraunhofer
UMSICHT, the results of this study can also be readily applied to larger enterprises. However, migration projects in small companies are also worthwhile starting with seven thin client workstations. In practice these savings could still be even higher because the Fraunhofer UMSICHT study assumed a standard usage period of five years for better comparability. However, the usual service life for PCs is actually more like from three to four years and for thin clients from six to even eight years. This is largely because these rugged end-user devices have no mechanical parts that can wear out or break down, such as hard drives or cooling fans.

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