Maximize the value of IT assets from

Maximize the value of IT assets – from procurement to disposition Neil Peters-Michaud April 18, 2012 Proprietary and Confidential

Topics • Understanding the TCO of computers • Optimize the economic and environmental lifecycle of IT assets • Tool introduction – EPEAT product catalog – Life cycle costing worksheet 2 Proprietary and Confidential

What goes into the cost of a PC? • Total Cost of Ownership is a method for the systematic accounting of all costs (direct & indirect) related to IT investments • The initial purchase price is relatively small part of total cost or owning and operating IT products. – Networked PC costs: $13, 200 annually • 15% purchase, 80% operations, 5% disposal (Gartner) 3 Proprietary and Confidential

Examples of Costs Life cycle Costs Acquisition & Procurement • Hardware purchase or lease, including all accessories • Software licenses • Admin costs (bid specs, contracts, tracking purchases, delivery, installation) Operations & Maintenance • IT and personnel training • IT support such as network and software management, help desk • Internet, energy, furniture and floor space costs • Software & hardware upgrades & related staff downtime Disposition costs • Admin costs (asset management, inventory tracking, contract services) • Sanitizing data • Storing, shipping and disposition costs 4 Proprietary and Confidential

IT Lifecycle – survey of practitioners • IBM/Wipro PSA analysts gathered detailed data from large enterprises in 2009. (50 North American, 25 UK, and 25 German companies) on the costs of PC management and current refresh practices • The analysts selected a set of key cost drivers from the analyzed customer data and modeled the projected costs and benefits of maintaining refresh cycles, buying mobile PCs, and upgrading to new technology. • Analysts then translated the findings into a financial model that quantifies the value of proactive refresh rates, mobile PCs, and Intel v. Pro technology.

Participant Screener Wipro interviewed 106 participants who were screened for the following profiles: – IT/IS Titles such as CIO, VP/Director/Manager of IT – Involved in the management or deliver PC support services, such as remote/on-site support, PC management – Understand the costs and technical requirements of providing PC support services

Participant Industry and Firmographics 14 Professional Services Communication 12 Process manufacturing 12 Insurance 11 Other 9 Banking 9 Government 8 Healthcare services 5 Retail trade 5 Construction 5 Other Financial Services 4 Wholesale 3 Utilities 3 Transportation 3 Education 2 • Organizations with: – 5000+ PCs for North America and 2500+ PCs for Europe – At least 25% mobile PCs – Must handle at least some aspects of PC support with internal IT staff

After 3 years, Mobile PC support costs exceed $1100, making it less expensive to refresh Mobile PCs in Year 4 experience a 59% increase over year 1 support costs Cost Drivers Updating PCs PC Diagnosis and Repair Isolate and Recover Infected PCs Source: Wipro Consulting Product Strategy and Architecture Practice primary research with 100 US and European companies, March 2009 Hard Disk Failures

Mobile PCs deployed on a three-year cycle offer the lowest total equivalent annual cost The Equivalent Annual Cost of owning a Mobile PC is lowest for a 3 year lifecycle – indicating that a 3 year refresh is the optimal refresh option for Mobile PCs *TCO comprises of the PC Acquisition Cost, Support Costs (including the costs of Updating PCs, Diagnosing and Fixing PCs, Isolating and Recovering PCs after a security incident), and Out of Warranty Repair Costs

After 3 years, Desktop PC support costs exceed $600, making it less expensive to refresh Desktop PCs in Year 4 experience a 59% increase over Year 1 support costs Cost Drivers Updating PCs Diagnosis and Repair PCs Isolate and Recover Infected PCs Source: Wipro Consulting Product Strategy and Architecture Practice primary research with 100 US and European companies, March 2009 Hard Disk Failures

Desktop PCs deployed on a three-year cycle offer the lowest total equivalent annual cost The Equivalent Annual Cost of owning a Desktop PC is lowest for a 3 year lifecycle – indicating that a 3 year refresh is the optimal refresh option for Desktop PCs *TCO comprises of the PC Acquisition Cost, Support Costs (including the costs of Updating PCs, Diagnosing and Fixing PCs, Isolating and Recovering PCs after a security incident), and Out of Warranty Repair Costs

Optimize economic and environmental benefits to reduce TCO Costs related to energy use, upgradeability, service/maintenance and disposal affect the environment similarly 12 Proprietary and Confidential

EPEAT • Electronic Product Environmental Assessment Tool (www. epeat. net) • Voluntary environmental performance standard for computer desktops, monitors, laptops and (soon) imaging devices • Addresses multiple environmental attributes • Three-tier rating system: bronze, silver & gold • Verification process to ensure conformance 13 Proprietary and Confidential

EPEAT acceptance • Large number of available products – Searchable web database – Over 1, 900 products and 30 manufacturers • All federal agencies ($70 billion/year) • Private sector users: – KPMG – Mc. Kesson – Kaiser Permanente 14 Proprietary and Confidential

TCO Worksheet This TCO Calculator Tool allows users to compare the costs of different options for the life cycle management of IT equipment with an emphasis on decisions that may have an environmental impact. For example, what is the annualized cost of purchasing ENERGY STAR qualified equipment compared to a conventional unit? What will be the cost savings of extending the period of use for equipment from 4 years to 5 years, or purchasing only desktop processing units and keeping the current desktop monitors? 15 Proprietary and Confidential

Best practice discussion 16 Proprietary and Confidential