Rodent Regatta

Earlier we mentioned Sun’s new drive to offer alternatives to Microsoft’s notions about the approach and costs associated with information technology. Some details are out.

One interesting aspect of this is that Sun appears to want to pursue companies with 1000 employees or more. ”Partners” can chase those with fewer employees. The pricing reflects a dramatic advantage for Sun when comparing a 20-person business that outfits each desktop PC with Microsoft Windows and Office or Sun’s Java Enterprise System and Java Desktop System.

At first glance it would appear that an annual update to the Microsoft approach with 20 people might be 20 times $350 or $7000 as an annual cost to keep the software updated. Sun’s approach seems to call for 20 times $150 or $3000 to keep the 20-person company up to date.

What am I missing here? I think I’ve actually estimated the cost of the Microsoft updates at a rather low price considering that Exchange, Windows Server and potentially some other server-side software might be the comparable components to what Sun is going to offer.

How on earth can Sun offer ”60 hours a week of support?” I’m confident that has to be a misprint. At minimum wage, 60 hours a week represents 3,120 hours per year or well over $15,000. There’s an error there somewhere.

I have a friend who makes a living selling no products at all. He simply configures small office networks and maintains them. He only works on Microsoft’s products. He’s really good at what he does. How will Sun’s alternative approach degrade the fees he can collect? Will Microsoft lower their fees? Will network administrators like my friend lower their hourly rates?

I remember a time when Gartner said something like, ”small businesses spend between 1% and 3% of sales per year for their I.T. expenses.” Every three years or so, they face a capital cost or they trend to the 3% number and expense everything.

In a small business this must cover fees for software, hardware, outside assistance, tapes, CD’s, virus software subscriptions and new batteries for the battery backups, etc. Doing the arithmetic, we see that’s only $100,000 to $300,000. In a business with $5 million in sales, you can cut those amounts in half.

Sadly, most small businesses don’t track I.T. costs separately from paperclips and coffee cups!