Published:

• 2004  IMMS

• 2004  InStar Newsletter

The Hidden Costs of Running A Network-
Revisited  ©2004

Since I wrote a column in 2001 regarding TCO (Total Cost of Operation) of a local area network, the world of business and computer technology has evolved, and not necessarily for the better.  During the past three years, a tidal wave of super-viruses, spyware and Windows security updates has driven the replacement cost of servers and workstations to an all-time high.

One would think that terrorism would have been the leading cause of  attacks via the Internet, and perhaps we will find out that terrorists had a hand in the creation and distribution of some of these viruses.  More than likely, however, we are just seeing the results of a fast-growing group of hackers, some cooperating with others, the rest working alone.  As operating systems become more advanced (read that: "complex"), more tools are developed to invade.  Also, I expect to see the number of hackers grow exponentially as new computer science majors find their once-lucrative job market has flown overseas by the time they graduate.

In September, 2002, the mBlast viruses began to attack viciously around the world, causing the largest repair costs to corporate networking in history.  Incredibly, Microsoft's own security update website, where the public would link to download protective patches, was among the primary sites attacked.  Since that time, Microsoft and the major anti-virus software companies have been putting out a myriad of updates to fight the daily onslaught of bugs and breaches.

A new breed of intrusion has appeared over the last year or so, and has risen to nearly match viruses as the leading headache to IT managers and workstation users.  Spyware loads onto systems via Internet Browsers (like Internet Explorer) and some do little more than take up space on your hard drive.  Many, however, actively run in the background, taking up precious resources and bandwidth.  Accumulate a few of these and you'll quickly find that you are unable to do much with your computer at all.  Like anti-virus software, anti-spyware programs are now a necessity of computing life.

I've described these issues as the backdrop for one of the basic routines of computer repair.  One can no longer replace an office (or home) PC by purchasing a new computer, hooking up the hardware and attaching to the network.  Microsoft security updates and patches by themselves can take several hours of installation, and not unattended.  Even replacing a failed hard drive will take at least this much effort.  When a server needs replacement, it can take days.

This directly affects "TCO", or the cost of running a network.  Labor is the largest expense in network maintenance, and the new TCO models show a substantial increase in this cost.

There are ways to deal with today's reality of network security and maintenance.  One option being selected by some IT departments is the use of Symantec's "Ghost" or similar drive-copying software.  At first glance this might seem to minimize the downtime of replacing a workstation or its drive, but to work well, the hardware of all systems on a network should match as closely as possible, and the Ghost image needs to be maintained and kept updated.  Each time a new update or patch comes out, the drive image needs to be brought up to date and each time a new piece of hardware is added to just one PC, a new image may be needed for that workstation alone.  It can take as much time and labor overseeing a drive-copy solution as not using it at all.

A much better solution is to outsource your primary application and data to an ASP or other hosting company, moving the bulk of the responsibility of antivirus and other security to the hosting facility.  This does not totally alleviate the need to keep workstations updated and protected, but the risk of loss or damage is greatly reduced when your data is located and protected elsewhere, so updates and patches can be performed less often and can be more easily scheduled.  If the worst case scenario occurs, i.e. a virus shuts down your network, a stand-alone PC with an Internet connection can still run your applications.

Your TCO can be affected positively by the ASP model in other ways, as well.  The cost of hardware can be reduced over time, since their lifespan would be affected only by wear and tear, rather than the requirements of your software.  Usually, wear and tear is reduced with ASP, so a typical workstation can double its normal 2.5 to 3 year lifespan by using a host for its software. 

Apply the same principles to a server, and cost savings are even more significant.  Taking into consideration just the typical costs of maintaining a 10-user network that the hosting model avoids, we've calculated an annual cost of $7,620.*  Add to that the lengthening of the lifespan and the reduced down-time due to viruses, etc., and there can be shown a cost savings by outsourcing.

The difficulty many managers or owners have in choosing whether to outsource to an ASP is that they would be writing a check to the hosting facility that was not being written previously.  Cost savings are not always obvious, but the new hidden costs I've discussed here are real.  In the past, the benefits of ASP (working from anywhere, backups, protected from natural disasters, etc.) had to outweigh the cost of the service.  This is no longer the case.

Note: WorldPOINT articles are copyrighted and the exclusive property of WorldPOINT Inc. and author Jack Huber. They may be copied or reproduced by non-ASP's and non-competitors only in their entirety with no modifications, including the source and byline, and distributed without charge or financial gain.