Analysts Say, "Don't Forget the TCO"

By MICHELLE MAN
Published: December 20, 2007

IF YOU NEED TO DEPLOY handheld computers in your organization, it pays to invest in durable, business-class devices. Buy a cheap consumer-grade device, and it'll cost more in the long run with expensive downtime and support issues. So says an independent study by market research firm Venture Development Corporation (VDC), which shows that consumer-grade handhelds result in up to 23 percent higher Total Cost of Ownership (TCO) than more business-specific durable devices, such as the Socket Mobile SoMo™ 650, when used in a working environment like healthcare or field service.

The report illustrated that companies frequently underestimate the hazards that mobile devices will be exposed to, and that most organizations fail to do effective TCO analysis before selecting a mobile device. As a result, organizations select consumer devices based on lower upfront costs, but eventually pay for their decision with shorter product lifecycles and lost productivity.

The report showed that mobile device failures typically result in an hour of lost user productivity and an hour spent on internal support time, with durable devices requiring less support time: The average amount of time internally spent on each failed unit is 53.5 minutes for a durable handheld compared with 64.5 minutes for a consumer-grade device and 61.8 minutes for a smartphone. Additionally, the average monthly failure rate for durable devices is lower: 2.1 percent compared with 2.5 percent for a consumer handheld and 2.8 percent for a smartphone.

Considering the Cost Implications

“The need for a standard approach to TCO analysis of mobile devices is clear. Time spent on proper evaluation of mobility solutions would result in considerable cost savings for organizations,” said David Krebs, director of the Mobile & Wireless Practice at VDC. “Our research shows that, while consumer devices such as smartphones and PDAs, are popular among professionals, companies need to consider how they will be used and the cost implications before making a decision. The results show that more ruggedized devices often offer organizations the best value overall, with durable handhelds representing a strong option for several markets and applications.”

Smartphones, in particular, illustrated the issue faced by businesses. Although smartphones are the least expensive devices to deploy and require the least training, they fail the most often, cost organizations the most when failures occur, have the shortest lifespan and are twice as likely to be stolen than the average handheld or notebook. In total, initial purchase price represented only 7% of TCO for smartphones.

Don't Forget the TCO

“The VDC report clearly illustrates the need for mobility solutions developed specifically for business usage,” said Bob Zink, senior vice president of sales and marketing at Socket Mobile. “Socket Mobile is directly addressing this requirement with the first business mobility device to fill the gap between consumer-grade products and fully ruggedized industrial options. The SoMo 650 offers the durability, reliability and integration capabilities necessary to lower TCO while still in an easy-to-use, portable, consumer-like form factor.”

Other key findings of the report included:

• Only 31.6% of organizations conduct TCO analysis during the mobile decision-making process.

• The two leading sources of device failure are cracked displays and damaged hard drives. Drops are the leading cause of failure.

VDC’s report, entitled ‘Total Cost of Ownership Models for Mobile Computing and Communications Platforms,’ is available from http://www.vdc-corp.com/PurchasedDownloadFile.asp?type=brochure&id=2023