There’s no getting away from it – PCs and notebooks are much cheaper than they used to be. The Portable from Compaq, now part of HP, cost $3,590 in 1983. Today, you can buy a new portable computer for a few hundred pounds. But as the price of computers has fallen, companies have been taking a harder look at the other costs involved in PC ownership. Things like maintenance, support, recycling, security and energy consumption add up to a great deal more than the initial purchase. Sometimes the cheapest computer isn't the best value.

Studies by Gartner and other analysts show that when these other costs are added into the equation, the lifetime cost of an individual PC can be as much as £12,000.

When you buy a car, there are guides that will tell you how much it will cost to service, what its fuel consumption will be and how much you might get for it when you sell it on. A car that looks cheap on the dealer’s forecourt may end up costing you more than a dearer model that holds its value or has better fuel economy. Then there are the car companies that advertise a low price, but after the addition of a few accessories like air-conditioning and a CD player, it stops looking like a bargain. Functionally all cars do the same job. Financially, there is a vast difference between one model and the next. It’s the same with computers.

Remote clients

Remote clients are one way in which smart companies have been saving money by investing in IT. A remote client replaces a traditional desktop PC with a thin client that has no moving parts. It still has a screen, keyboard and mouse, and from the user’s perspective it still runs Microsoft Windows like a regular computer. But the guts of the computer – the things that go wrong – move to a data centre. This cuts IT support costs dramatically because engineers don’t need to visit users at their desks when things go wrong. Research suggests that this can cut the cost of providing a computer to an employee by up to 50 percent over five years. In this context, the marginal increase in purchase cost relative to a desktop PC is a sprat to catch a mackerel.

It ain’t what you do, it’s who you do it with

It’s no good squeezing a supplier to get a good price if they are not easy to do business with. Process matters here as much as price, even if the cost of dealing with a less efficient supplier doesn’t show up on anyone’s budget. For example, a global car manufacturer worked with HP to standardise its entire PC fleet on three models with a consistent configuration and asset tagging throughout the world. HP created a centralised global catalogue and integrated it with the company’s purchasing systems to give them detailed order tracking. As a result, the car company saved on management time and support costs.

Similarly, the way PCs are managed has a big impact on their lifetime cost. An optimised infrastructure, where standardised computers are managed and updated remotely among other best practices, can save several hundred pounds per PC.

Systems integrators do it over three years

One group of companies presents an interesting role model. Systems integrators, such as Cap Gemini or Capita, provide computers to their clients on a per-user, per-month rental basis. Their entire business model depends on delivering IT services at the lowest lifetime cost possible. It concentrates the mind wonderfully. What they are interested in is “product reliability, servicing costs, transition costs at the end of life and power consumption,” says David McLellan, an HP consultant who specialises in this sector. Purchase price, though important, is not a primary consideration, not least because price variations between makes are so small.

A green PC is an economical PC

When it comes to energy consumption, not all computers are created equal. The latest U.S. Environmental Protection Agency Energy Star specification, Version 4.0, came into effect on July 20^th 2007 and mandates significant improvements in energy efficiency. Products such as HP’s DX2500 Microtower PC already meet this standard and could reduce energy consumption by up to 45 percent. Across thousands of PCs, this saving could be a noticeable boost to the bottom line.

Apart from the direct financial benefit to owners, greener PCs are better for the environment too. Energy efficiency reduces carbon emissions, and recyclable components reduce landfill. Manufacturers are also getting more ecologically aware. For example, last year HP recycled more than 70,000 tonnes of hardware and print cartridges.

Whose PC is it anyway?

Isn’t PC purchasing a job for the IT department? Yes, primarily. But, as George Clemenceau said during WWI, wars are too important to be left to the generals. The same is also true of computers and IT departments. According to Nicholas Carr, former editor of Harvard Business Review, businesses around the world spend around £1 trillion a year on IT. It accounts for nearly 50 percent of capital spending by American companies. These are big numbers and big investments, and business leaders have a duty to spend wisely.

Achieving dramatic reductions in the total cost of ownership can require strategic decisions at a board level. Switching to a remote client model is a big (though manageable) change. But even at a tactical level, taking the longer term view can produce real savings at little or no cost. Choosing energy efficient computers or switching to suppliers that integrate more efficiently into your purchasing operation and deliver better quality products. Details matter, but from a business perspective companies need to start by asking the right questions, investigating their options and taking a holistic view of the true cost of their IT.