IT@Intel Brief
Intel Information Technology
                               Client PCs as Strategic Assets
Computer Manufac...
Technology Decisions                                   Simplifying Enterprise
Impact TCO                                  ...
In planning our refresh cycles, we look for features that meet our                +
strategic line-of-business and fleet m...
Through user surveys and observational studies, we demonstrated that
wireless and mobile technologies offer a greater than...
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Client Pcs As Strategic Assets


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Client Pcs As Strategic Assets

  1. 1. IT@Intel Brief Intel Information Technology Client PCs as Strategic Assets Computer Manufacturing By actively managing Intel’s client PC fleet as a Client Management Profile: Client PC Strategies strategic asset, Intel IT has consistently decreased May 2007 total cost of ownership (TCO) for client PCs, achieving • 67% TCO reduction over 11 years a 67 percent reduction from 1995 to 2006. • Laptops provide greater than 5% Because PC acquisition costs account for only time savings per employee per week 20 to 30 percent of TCO, we don’t fixate on • Higher-specification PCs these costs alone. Instead, we align our PC fleet improve security, increase fleet investments and management practices with manageability, and reduce TCO Intel’s strategic goals. We focus on factors that not only reduce TCO, as shown in Figure 1, but also deliver business value to Intel, adding capabilities that keep Intel agile and competitive. $10,000 8,000 Downward TCO trend continued during mobile transition Reduced hardware pricing and 6,000 client support, economies of scale 4,000 2,000 0 1995 1998 2003 2006 Figure 1. Total cost of ownership (TCO) of Intel client PCs shrunk by 67 percent from 1995 to 2006. Intel reduced client PC TCO over time while adding strategic capabilities, including a major shift to mobile computers that started in 2000. TCO savings come from reductions in costs for hardware, software, and end-user support time. IT@Intel
  2. 2. Technology Decisions Simplifying Enterprise Impact TCO PC Management In the mid-1990s, Intel’s PC client policy We achieve many benefits by simplifying our was based on two assumptions: a four-year PC fleet: depreciation cycle and that lower-cost “value” • Reduced complexity of the installed PC PCs for general use was the most economical base decreases overall costs and improves purchasing strategy. However, when we network security. examined the return on investment (ROI) of more powerful “mainstream” client systems, • Fewer hardware configurations lower we learned that this was not the case. IT support costs by reducing training, documentation, and unique process We discovered that we were consistently requirements, and minimize break and fix moving older PCs to users with less powerful costs by requiring fewer system and system requirements much earlier than expected component inventories. because these value PCs could not support the latest OS update, and they rarely lasted the • IT staff can deliver solutions faster and expected life span. cheaper because it takes less time to qualify and test software and updates. Legacy OSs and older versions of Web browsers increased security risks and reduced productivity, • Bug fixes can be deployed 10 to 30 requiring us to make additional PC purchases. This percent faster, significantly improving effectively forced us into a more frequent refresh network security.1 cycle than we had planned and increased our Simplifying the PC environment involves not overall costs. We actually shortened the useful life only reducing the number of configurations of our assets by not buying high enough. deployed but also proactively decommissioning older systems that no longer deliver adequate Moving to a performance or provide optimal security Strategic Approach protections. Studies demonstrate that keeping This shift in perspective led us to view our client PCs longer than three years significantly PCs as strategic assets. They now have to meet increases support costs and security exposure, line-of-business requirements and also address a suggesting that a three-year refresh cycle is broader range of factors that are not accounted optimal, as shown in Figure 2.2 for in TCO but nonetheless significantly affect Intel’s bottom line and competitiveness. Managing the PC We focus on three objectives for our client Life Cycle Proactively PC fleet selection and management: To simplify Intel’s PC environment, we have reduced the variety of platforms we support. • Enhanced security Purchasing higher performing PCs allows us • Improved productivity for both users to offer a smaller number of standard desktop and IT staff PC and laptop configurations that apply across • Lower costs usage segments and consequently reduce TCO. For example, our standard laptop configuration Optimizing performance and reducing costs for knowledge workers—which includes Intel® require simplification through standardizing dual-core technology, increased memory, and platforms and processes, and that we take higher-resolution displays—also scales to advantage of new technologies to achieve engineering users. This eliminates one of the improved productivity, efficiency, and security. platform configurations we must support. 1 “Measuring the Benefits of Mobile Computing in the Enterprise,” Wipro Consulting Ltd. 2005. 2 “The Financial Aspects of PC Fleet Management,” Intel Corporation, June 2003.
  3. 3. In planning our refresh cycles, we look for features that meet our + strategic line-of-business and fleet management requirements, including: Optimal Lifetime End of Standard Warranty • Extended Warranty Costs • Stability • Hardware Failures • Long product ordering cycles and long asset life • Driver Issues • Increased Virus/ • Global availability Incidents Security Breaches We control our costs by developing a single, gold software image • Application Conflict Errors client build for our selected stable platforms. This consequently improves security because we can update the fleet quickly, without compatibility problems. We also invest in technologies that simplify our PC fleet management processes and reduce our support costs, such as Intel® vPro™ processor technology. Intel vPro processor technology provides remote PC asset and problem resolution capabilities, even when systems are powered Year 1 Year 2 Year 3 Year 4 off, and hardware-enhanced security capabilities. Figure 2. Support costs increase substantially after the Finally, we streamline our software acquisitions and deployments, first three years in a PC’s lifetime. aligning them with hardware release dates to create predictable, cyclical transitions from one generation of software and PC technology to the next. We take advantage of programs such as Intel® Stable Image Platform Program (Intel® SIPP), which coordinates hardware manufacturing schedules to create stable configurations for 15 months. Improving Productivity through Technology We improve productivity by providing machines optimized for the way employees work and for the computing demands placed on them, delivering business value in addition to lowering TCO. Intel shifted predominantly to mobile computing based on analysis of productivity and business value gains. Figure 3 shows this transition. Desktop PC to Laptop Comparison 20% 20% Laptops Desktops 40% Desktops 60% 80% Laptops 80% Desktops Laptops 1995 2000 20061 1 2006 Regional Breakdown of Laptops: Europe 12.73%; Asia 20.41%; Americas 66.86% Figure 3. Intel shifted from desktop PCs to laptops to enhance productivity through mobility. Wireless and mobile technologies offer a greater than five percent time savings in an employee’s work week.
  4. 4. Through user surveys and observational studies, we demonstrated that wireless and mobile technologies offer a greater than five percent time savings in an employee’s work week. This time savings more than covers Acronyms the increased hardware costs of laptops over desktop PCs. By replacing Intel® SIPP Intel® Stable Image Platform Program 6,400 desktops with laptops, we achieved productivity gains valued ROI return on investment at USD 26 million (three-year net present value). Over five years, we transitioned to an 80:20 ratio of laptops to desktop systems, improving TCO total cost of ownership productivity and continuing to drive down TCO. Conclusion By managing our client PCs as strategic assets, streamlining our processes, and buying higher-specification PCs that improve productivity and security, we not only reduce TCO but also deliver measurable business value year after year. In 2007, we are investing in our biggest PC refresh effort in 10 years. We will be introducing an integrated client platform that includes the latest Intel® mobile platform combined with a new operating system, virtual machine, office suite, and Web browser. This significant investment aligns with Intel’s strategic goals and gives Intel employees a new level of PC capability. This paper is for informational purposes only. THIS DOCUMENT IS Intel, the Intel logo, Intel Leap ahead. and Intel Leap ahead. logo, PROVIDED “AS IS” WITH NO WARRANTIES WHATSOEVER, INCLUDING and Intel vPro are trademarks of Intel Corporation in the U.S. and ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, FITNESS other countries. FOR ANY PARTICULAR PURPOSE, OR ANY WARRANTY OTHERWISE *Other names and brands may be claimed as the property of others. ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. Intel disclaims all liability, including liability for infringement of any proprietary Copyright © 2007 Intel Corporation. All rights reserved. rights, relating to use of information in this specification. No license, Printed in USA Please Recycle express or implied, by estoppel or otherwise, to any intellectual property 0507/JLM/RDA/PDF ITAI Number: 07-1001b rights is granted herein.