Apple Inc (AAPL)

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Macs are cheaper than PCs by half
Monday March 6, 1:42 pm ET

http://biz.yahoo.com/hbusn/060306/022706_business2_browser0227.html

The last place you'd expect to find praise for a Mac is the pages of a PC trade magazine. But Network World columnist Winn Schwartau runs the numbers on what it truly costs to run a PC and a Mac in a business, and finds that a PC is nearly twice as expensive as a Mac when one takes support costs into account. Antivirus protection, firewalls, and IT labor to keep a PC secure and operational add up to a bill of $1,300 to $4,000 a year, according to Schwartau. Of course, there's one hitch in Schwartau's calculations: As the Mac gets more popular, it's becoming more of a hacker target, and protecting against those new threats could drive security and support costs up over time.

Going above and beyond
http://www.networkworld.com/best/2006/022706bestbreaker-schwartau.html

Selected by Winn Schwartau, president of Interpac, "On Security" columnist. Discuss MacTel.

In April 2005, Apple introduced the OS X 10.4, also known as Tiger. In January, it announced MacTel computing. And now imagine desktop and laptop computers that don't crash for months at a time. Imagine PCs that are close to immune to the endless train wrecks caused by viruses and worms. Imagine increasing the performance of a secure computing environment by as much as 400% overnight. Imagine an engineering company that builds and delivers properly integrated hardware, properly configured security default conditions - almost plug and play. Imagine a computing environment in which the endpoint is not a viable target for the bad guys. And imagine that the total cost of ownership for these benefits is lower than what you are paying.


No, I am not a converted Mac bigot. My company still uses WinTel machines for many things, but not those daily mission-critical tasks for which availability is the paramount security issue. My concerns are not that different from that of the typical small to midsize business or global enterprise. I want my computer to: work every time; be 100% compatible with my enterprise and applications; and have a high degree of immunity to the prevailing threats out of the box.

Corporations tend to ignore anything but WinTel machines, partly out of habit and partly because the Dell/HP/Network Associates/Symantec representatives are in their faces every day with next-day promises. Consider this the endless cycle of the heroin sale in IT. Macs also get ignored partly because they're so different, partly because they weren't quite ready for prime-time enterprise play and partly because they are more expensive then WinTel machines.

I chose to test this last thesis because price is a leading consideration in all aspects of IT operations and a fairly simple exercise. I designed a total cost of ownership (TCO) tool to see whether Apple's higher prices were justifiable. The criteria that go into a TCO go beyond per-box cost, per-seat operating system and Office licenses, and shipping.

The tool will work for any configuration: WinTel, Mac, MacTel, Linux and so on.

We included all of the third-party security products needed to keep a WinTel machine somewhat secure and checkbox compliant. We considered the prorated costs of per-user upgrades, patches, relicensing expenses and overhead factor from lawyers, managers and technical staff.

The TCO tool considers reliability costs, downtime per user per year, productivity losses/gains, reboots and system maintenance. The enterprise also needs to consider the help desk and other support time/costs per user per PC.
The TCO tool also allows you to calculate the resale value of the computer. It did not take long to discover that Mac's resale value is much higher than WinTel's.

The results of this TCO astounded me. For my small enterprise, owning a WinTel box for three years costs twice as much as owning a MacTel. When I talked with several of our clients, I found that the burdened cost of ownership per PC - just for support - ranged from $1,300 to $4,000 per year.

If I can cut down on the burden of monthly and annual subscriptions, and dramatically reduce my annualized per-seat support costs, not only does my TCO go way down, but as an added plus my technical headache factors decrease, too.

Apple's two- to five-year road map is clear. As it begins to stake ground beyond small enterprises, it will want a piece of the global enterprise. In June 2005, Apple CEO Steve Jobs said: "We are talking to Intel." Duh! How hard is it to imagine that OS X was simultaneously being developed for an Intel platform, and how long has the OS X parental code been running on Intel? The answer is for years. The MacTel Skunkworks has been in place for several years. I read this as reliability.

Apple's non-iPod growth is going to need to come from displacing Microsoft's Vista as the de facto next-generation operating system for enterprise migration. At recent security shows I have seen that more than 50% of my compatriots use Macs and recognize that OS X was a huge leap forward. We are all suggesting some forms of migration. The small enterprise and home office should migrate completely, and some midsize enterprises will take the plunge as what I called the KISS-OS becomes more cemented in the IT zeitgeist.

I believe that much of Apple's enterprise future will rest with the adaptation of the appliance mindset and eradicating the cultural meme: one size fits all.

If you can live with some of Apple's arrogance (don't expect too many niceties - Apple is an engineering company, after all), you should really take a look at the security TCO of WinTel vs. Mac. If you are honest with your answers, you may find that you can get many of your enterprise endpoints more secure than ever for a lot less than you thought.

Who's using it? I don't expect that any major enterprise is going to go out and convert 100,000 seats to MacTel. But I am seeing large organizations deploying Mac networks across specific departments, and I mean more than just graphics. Entire sales and marketing departments within some financial firms are actively migrating to Mac and MacTel. Gene Fredriksen, chief information security officer for Raymond James Financial, in St. Petersburg, Fla., says he is deploying additional Macs within portions of the enterprise to reduce TCO of user computing.

Mac migrations in the low tech area of big companies will precede any global shift. Why should a company pay more than $2,000 a year for PC support of a clerk who only uses Web applications when a $500 Mac Mini will do? Retail environments and customer service desks are poised for a more reliable and less expensive smart terminal. Many distributed corporate applications are appliance-oriented, with only one or two uses. The current bloated and fault-prone "I can do anything if you know what you're doing" operating system is not for everyone, and we are paying for it dearly in IT budgets.

OS X also keeps users from doing things they shouldn't. Most enterprises do not want users installing software on their machines - they want a box to run mail client and browser, and a couple of Office applications. Effective restricted rights are the default, and make Mac/MacTel ideal for non-administrative enterprise distribution.

How much will it cost the average enterprise? MacTel is priced from $1,300; enterprise volume purchase agreements also are available