Total Cost Ownership Hypothesis
“Moore’s Law” + hypercompetitve marketplace improves cost and speed of CPUs, cost and capacity of memory and disks
Morris (IBM) $3M comparison 1984 v. 2001:
- CPU: Minicomputer to PC, 3000X faster
- DRAM: Memory boards to DIMMs, 3000X bigger
- Disks: 8-inch drives to 3.5-inch drives, 4000X bigger
Unless avg. user demands grow with Moore’s Law, a service increases in number of users
HW/SW costs shrink; salaries go up over time
Hypothesis: Cost of Ownership is more a function of number of users versus HW/SW $, so T.C.O. today is mostly people costs