Total Cost of Ownership (TCO) of Enterprise Wireless Email

Introduction

Worldwide, businesses are undergoing a historic shift from stationary to mobile computing. Wireless handhelds and smartphones, once considered luxuries, are increasingly perceived as necessary tools for conducting business in today’s climate. According to The Radicati Group, the number of mobile professionals worldwide is expected to grow to 369 million by 2008. An increasingly large number of these people are expected to carry wireless e-mail and application access solutions on their handhelds and smartphones.

For many companies, the evolution from stationary to mobile computing can be a rapid process. Once introduced into a work environment, mobility tends to spread quickly through the workforce. Managers and end users come to realize that there’s real value in having fast and efficient anytime, anywhere wireless access to not only their e-mail messages, but to personal information management (PIM) functions (for example, calendaring, tasks and to-do lists and company and personal contacts), the corporate intranet, their customer relationship management (CRM) system and so on.

As user demands and expectations for mobile access increase, so do the demands on IT departments. In addition to managing behind-the-firewall software and systems components, the IT administrators often must manage a growing fleet of wireless handhelds and the software that resides on those devices. More and more IT managers are realizing that they need to have a more in-depth understanding of the wireless environment within their companies and that the best way to manage this environment is to opt for an enterprise solution that simplifies IT administration and increases IT control.

What is Total Cost of Ownership (TCO)?

In the business world, investments in business technology are typically driven by considerations of return on investment (ROI). ROI can be calculated in different ways, but it is fundamentally used to determine whether a proposed investment is wise and how much it will repay the investor. As an example of how an annual, recurring ROI is calculated, consider a software package with a one-time license cost of $1,000, one-time implementation costs of $2,000, and annual management and support costs of $1,500 each year. Suppose that users of the technology receive annual benefits valued at $3,000 per year. Then the annual, recurring ROI of that investment equals ($3,000–$1,500)/($1,000 + $2,000) = $1,500/$3,000 = 50%.

With wireless e-mail increasingly being viewed similarly to cellular voice service, most companies understand that there is significant value in providing wireless e-mail to mobile employees. As a result, the companies often don’t try to quantify the benefits. According to the findings of the Radicati Group research company, wireless e-mail access frees an extra 58 minutes of work time per day. Over the course of the next two years, this figure is expected to grow to 80 minutes of work time per day.

Savvy IT departments are becoming more cognizant of the “total, on-going costs” driven by a wireless e-mail solution, leading them to focus their efforts on finding the most reliable, cost-efficient solution. For these businesses, TCO often becomes the basis for their choosing a particular solution.

TCO helps enterprise managers assess both direct and indirect costs, as well as the benefits related to the purchase of an IT component. The goal for these managers is to find the most effective solution for the lowest TCO.

So how does an organization calculate TCO for an enterprise wireless e-mail solution? In general, there are three cost categories that incorporate all wireless computing costs. These categories are as follows:

• Initial deployment costs (i.e. “getting started” costs)
• IT management and support costs
• Handheld maintenance costs

Initial Deployment Costs

To provide wireless access for its employees, a company must first purchase and implement the required infrastructure. The infrastructure required to “get started” with wireless e-mail and PIM includes software, handhelds, wireless services, system hardware, installation, initial device provisioning and deployment of all handheld software and training.

Software

Almost all enterprise software comes with licensing costs. For wireless e-mail solutions, these licensing fees can potentially include wireless e-mail software, security software such as virtual private network (VPN) or firewall software, databases for logging of the e-mail system, software for managing the handheld fleet and the operating systems that reside on servers.

Handhelds and Wireless Services

To run a wireless solution, a company must invest in mobile devices for its users. These devices can range in price from free to several hundred dollars. Handheld costs are modeled as a recurring fee because handheld loss tends to be high (30 percent per year by some estimates*) and handheld replacement cycles tend to be relatively short in duration (2–4 years).

In addition to devices, a company must also choose a wireless data plan. These plans typically come as an incremental cost to a voice plan. In the United States, data plans generally cost between $30 and $50 per month, regardless of the wireless e-mail solution that is used.

System Hardware

All enterprise wireless e-mail solutions typically require the implementation of at least one server. Some solutions require or recommend multiple servers to perform functions related to transmission routing, scalability, e-mail attachment handling, event logging, security, handheld fleet management and so on. Because of the additional hardware, implementation and management costs, these solutions have a higher TCO. In addition, certain wireless computing solutions may require deploying additional firewall servers to enhance security in the demilitarized zone (DMZ), further increasing costs.

Initial System Deployment and Installation

Once a wireless e-mail solution is selected, the IT staff must architect, install and configure all server-side software required by the solution. To deploy software to the handheld fleet, enterprise wireless solution vendors may offer a range of deployment options—from remotely defining software configuration and security to having IT administrators configure the handheld fleet one by one. Some solutions, like Microsoft “Direct Push” wireless e-mail software may even require end users to set some configurations, like specifying the server path and domain name as well as whether encryption or certifications should be used. End-user involvement in any type of solution deployment often drives support (i.e., help desk) costs higher.
Initial Device Provisioning/Deployment of Handheld Software

Device provisioning and deployment can be time-consuming and expensive. Costs tend to increase proportionately to the number of wireless e-mail users using the solution. With many solutions, the IT staff must load and configure software (often through cradling the device to a PC) on each device. The more cost-efficient approach is to deploy software to devices Over-the-Air (OTA) without the IT staff having to touch individual devices. Additionally, wireless e-mail solutions that enable IT administrators to centrally configure and set policies (like the requirement to use a password on the handheld device) further help minimize costs. A final savings option is “group management,” which enables IT departments to set up groups of similar users so that they can apply different policies to different groups without having to administer policies and configurations on a user-by-user basis.

Training

To help users and administrators understand new technology, organizations need to invest in training. Performing adequate training up front is essential to ensure that IT administrators gain proficiency and users achieve a high level of productivity. The amount of required training varies according to the wireless e-mail solution selected. For example, wireless e-mail solutions that enable IT departments to remotely deploy software and configure policies, significantly reduce the amount of required end-user training.

IT Management and Support Costs

IT management and end-user support costs is the second of the three cost groups. These costs include system maintenance, upgrade and operating costs as well as end-user technical support.

End-User Support

End-user technical support is an on-going cost that scales as the number of wireless e-mail users grows. It may be tempting to ignore end-user support costs, especially for companies that are just starting out with wireless e-mail. Some companies assume that wireless e-mail users won’t need support – i.e. users will work through their own issues. However, this is generally a bad assumption for several reasons:

• System complexity: Wireless e-mail systems are by nature more complex than behind-the-firewall systems. Technical issues can arise within the wireless e-mail software (in the server or handheld software), within carrier or WiFi networks, or within the handheld hardware itself. Additionally, wireless e-mail users tend to be among the most mobile employees in the company. Without the proper remote support tools, having to coordinating with users to retrieve their handhelds when problems arise can be a significant time sink for IT resources.
• Deployment growth: Even though wireless e-mail deployments may start small, they will grow. Wireless e-mail is an addictive technology - Research-In-Motion’s BlackBerry™ assumed the nickname “CrackBerry” for a reason. As the wireless e-mail user population grows, support costs will grow proportionally.
• Mobile application growth: Most companies start their wireless initiatives by providing wireless e-mail. However, after using wireless e-mail, many users will ask for similar access to the corporate intranet, sales force automation (SFA) system, or other critical systems they need when they are mobile. If a flexible and supportable wireless infrastructure is not selected early on, your ability to provide mobile access to other applications at a reasonable cost will be limited.
• Mission criticality: Another common misperception is that users will not demand the same level of support for a wireless handheld as they might for a desktop or laptop. Again, because of the productivity benefits of using wireless e-mail, users tend to complain quickly and vocally when problems arise. IT will generally be compelled to provide high levels of support when user issues arise.

System Management and Monitoring Tools

Enterprise wireless computing solutions need the appropriate tools to monitor, troubleshoot, and maintain the end-to-end system. These tools may vary from built-in system monitoring to no monitoring at all. Built-in monitoring tends to be a better investment because it reduces downtime and system failures. Ideally, the tools provided offer IT visibility and troubleshooting assistance across server-side software, device-side software, wireless network, and the device hardware. Some solutions provide real-time views of a device while others do not have the capability to tell you the number of devices connected to the server. In times of crisis, access to helpdesk support is invaluable to end users. A useful helpdesk needs to have the appropriate tools to support all users.

Handheld Maintenance Costs

From time to time, organizations have to invest in upgrading software and/or deploying new software to handhelds. These costs are categorized as handheld maintenance costs. The category’s primary cost drivers are upgrading and deploying future line-of-business and security applications, as well as the expected life of handheld hardware itself. Because wireless e-mail is a relatively new technology, many IT organizations underestimate the costs of handheld maintenance. Compared with more mature laptops and desktops, wireless handhelds - along with their firmware, operating systems, and mobile applications – tend to require more maintenance, upgrades, and patches. Without the proper tools and infrastructure, like over-the-air software management, handheld maintenance costs can be significant.

Upgrading and Deploying Handheld Software

Enterprises periodically need to upgrade software on the handhelds, especially in areas of security. Wireless computing solutions that can handle group upgrades OTA enable IT departments to push updates to all their end users. Given that wireless e-mail users are by nature mobile and frequently away from the office, being able to upgrade the wireless e-mail software as well as other key software like virus protection completely OTA—without ever touching the device—represents a significant IT cost savings. Additionally, being able to keep all users on the same versions of software can drastically reduce IT support costs.

Wireless e-mail solutions that require IT administrators to physically collect devices and manually cradle/install software upgrades and other software utilities like virus protection can lead to significant recurring costs. For example, some solutions require that the IT staff spend 1–2 hours per device, loading software and testing the installation each time a handheld software update is needed. If an enterprise has 1,000 users and handheld software updates are needed twice per year, this extra time could equal between 2,000 to 4,000 man-hours per year!

The following table summarizes the key factors that affect the TCO.

About Good Technology
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