Ignore the price tag | Disruptive Leadership

The report was prepared by VitalWave Consulting, a firm specializing in consulting and research for technology companies growing businesses in emerging markets. They performed a study in India, funded by Microsoft, on the TCO of computers deployed in schools. They built a model that took various factors into consideration when estimating the total cost of owning a computer over a period of time.

Purchase cost, maintenance, support, training, replacement cycle, and electricity cost are just a few of the elements they factored in. They looked at desktops, laptops, and ultra low-cost laptops like the XO and Intel’s Classmate PC. The report also compares the differences between TCO in India and TCO in a “global” model

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The price for the XO and Classmate PC communicated in the press was the price BEFORE shipping, duties/tariffs, VAT/taxes, distribution markup, and various other costs. Even if you added all those factors, the price can vary greatly country to country, so decide carefully on what price you communicate. If you find significant variations, err on the side of being cautious.

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TCO can be a powerful marketing tool if your product has a clear advantage in long-term cost savings. These could include lower maintenance costs, longer replacement cycle, lower power usage, etc. A good example is NComputing, which has a thin/network computer solution that allows seven users to use one PC for about a $70 purchase price per user and uses only a few watts per user. They have a TCO calculator that allows users to do their own calculation of cost savings vs. buying seven PC’s.

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