Wireless TCO Is Decreasing in Many Organizations

July, 2004

Wireless networks, more commonly referred to as Wi-Fi, are increasing both in quantity and performance. The ability to log into a network and use resources such as storage and printers without physical connectivity is attractive–especially to the mobile workers within an organization. Selecting an effective approach for installing Wi-Fi within your company requires first understanding the options available and the trade-offs inherent in each.

Wi-Fi remains an emerging technology, and some of the fundamental protocols are still under development. This immaturity does not necessarily imply great risk in developing a wireless network, but it does signal the need for caution in making choices. Most of the current generation of computers will be obsolete before the final Wi-Fi standards hit the street around 2007, therefore, new purchases will come with those changes incorporated. Furthermore, many of the existing components can be updated to the new standards in the future with either new software or firmware.

Despite the maturity level of the technology, many companies are now realizing a decrease in the total cost of ownership (TCO) of this technology, according to Computer Economics’ latest study. As part of our Information System Spending & Technology Trends 2004/2005 study, Computer Economics polled over 215 senior IT managers and executives regarding the TCO of a wide array of technologies and IT strategies. As Figure 1 illustrates, the respondents reported a very favorable trend when it comes to Wi-Fi technology. While 17% did state their Wi-Fi TCO had risen in 2004, almost 30% of the respondents indicated that it had decreased this year over 2003. Over half of the senior managers and executives stated that their Wi-Fi total cost of ownership remained level from 2003 to 2004.

qp070504 - Wireless TCO Is Decreasing in Many Organizations

The 2004/2005 study also looked at the return on investment (ROI) of the same set of technologies and IT strategies. Wireless ROI statistics in this year’s study also indicates a very positive trend. Almost half (47%) reported a positive ROI on their investment in WiFi, while only 16% reported a negative return. The remaining 37% indicated that the ROI on Wi-Fi in their organizations remained unchanged from 2003.

At this point, acquisition costs for Wi-Fi are noticeably higher than the ongoing cost of ownership, indicating that great care should be exercised in developing an overall strategy. Choosing the right Wi-Fi standard(s) to utilize and the right hardware and software tools to deploy to end users and to manage the wireless environment can have a major impact on the overall cost equation. For more information on this important topic, Computer Economics suggests reading our recent report, Wireless Networking in the Enterprise.

July 2004

Computer Economics’ latest report on wireless technology can be purchased online from our home page. This report is available for free to our annual subscribers. If you would like more information on purchasing any of our important reports and annual studies or to learn more about becoming a Computer Economics subscriber, please contact us at 1-800-326-8100, ext. 51.