In today’s rapidly changing business environment,
competition is intensifying and accelerating by the hour. Success is dependent upon the
speed at which an organization can empower its employees and reach customers. Technology
now plays a strategic role, and of all the tools available to the business community,
applications are the most critical. Organizations that can extend the reach of
business-critical applications to users wherever, whenever and however they are needed are
developing a strategic advantage in the networked economy.
Users need ready access to applications in order to be
productive, whether they are employees, suppliers, vendors or customers. Applications
enable organizations to generate revenue, offer new and better services, increase levels
of user knowledge and enhance overall productivity. For business organizations,
applications are crucial to achieving and sustaining a competitive advantage.
But delivering applications in this complex environment is becoming more costly than ever
before. Organizations must contend with increasingly diverse hardware, software and
network technologies that can be rendered obsolete in a matter of months. As a result, the
cost of providing applications to users continues to grow at an alarming pace.
The cost analysis
Here a new paradigm has been presented for analyzing the costs of providing
applications to users in today’s complex, internet-driven computing environment.
While most research has focused on a hardware-oriented view of costs, this model presents
an application-specific view and considers how applications are deployed, the locations of
users, the variety of connectivity options and the varied types of client devices.
According to The Tolly Group, the initial and recurring
costs of providing applications can well exceed $10,000 per user. Client and server
hardware costs make up less than 15% of this total. The other 85% includes the costs of
network and communications infrastructure and the cost of personnel required to develop or
acquire, maintain and update applications, and provide ongoing technical support. Finally,
there are the hidden costs of lost productivity incurred when users are unable to access
important applications with the appropriate level of performance.
The Tolly Group has determined that a server-based approach
to computing, such as the Independent Computing Architecture (ICA) of Citrix Systems Inc,
offers distinct direct and indirect cost advantages. These advantages enable an
organization to extend the reach of applications to users throughout the world while
increasing manageability and reducing costs by as much as 65%.
True cost of providing applications
In the recent past, analysts and IT professionals have developed numerous models for
estimating the total cost of IT services, popularly termed ‘total cost of
ownership’ (TCO). Such models have typically analyzed the costs of owning and
maintaining a personal computer (PC) or other specific forms of desktop computing
hardware. This hardware-centric view of costs is increasingly irrelevant in the age of the
internet, web-based computing and ecommerce. In today’s networked economy,
applications must be extended to a growing population of mobile and geographically
dispersed users, both inside and outside the company. Applications must be accessible
across a wide variety of connectivity options, from low-speed dial-up connections to
wireless, WAN and internet connections. And the growing diversity of computing devices,
from legacy PCs to network terminals, Macintosh systems, Unix workstations, NetPCs,
wireless tablets and emerging information appliances make the task of application
deployment all the more difficult and expensive.
A contemporary cost analysis should consider the total cost
of application ownership (TCA), rather than the total cost associated with specific
computing devices. In addition, the analysis must consider how applications are deployed,
the locations of users, the variety of connectivity options and the varied types of client
The Tolly Group has developed a model for comparing the TCA
of different computing models. This model based on extensive research investigated the
manner in which applications were deployed, and analyzed the costs associated with
developing, acquiring, delivering and maintaining these applications.
The Tolly Group’s analysis identified four critical factors that determine the
cost of application deployment. These include the location in which the application is
stored, the location in which the application is executed, the location of the data and
the location and means of connectivity of the user. The total cost of providing
applications can be analyzed more accurately and with greater predictability by
considering these four factors:
Physical location of the application: The choice of
where an application is stored–on the server or on the client–is a determining
factor in the cost and complexity of deploying and managing an application over time. IT
personnel costs, as well as the time required to distribute, install and configure an
application, and the cost of managing updates on tens of thousands of computing devices
must also be considered.
Execution location of the application : The choice
of where an application actually runs whether on the server, on the client or on some
distributed combination determines the hardware, network and connectivity required to
access the application. If executed locally, the device must be capable of running the
application. This often involves the need for extensive hardware upgrades or wholesale
replacement of platforms. If the application is downloaded from a server to run on a
client, ample network bandwidth must be available to provide the necessary level of
performance and responsiveness. These factors have a direct impact on end-user
Physical location of the data: The location of
stored data can also determine the speed at which information is available, as well as the
cost associated with protecting and backing up valuable corporate data.
Location of the user and means of connectivity: A
user’s location and network connectivity can have a dramatic impact on the cost and
complexity of deploying an application. Other cost factors include support personnel,
network infrastructure and the amount of bandwidth required. When considering all of these
factors, the cost of deploying a business-critical application to hundreds or thousands of
users in dozens of branches around the world can be prohibitive.
TCA and computing models
For the purposes of modeling and comparing TCA, this document classifies into three
Traditional desktop modelAll applications are stored
and executed on the desktop, creating the need for fully functional PCs and workstations
to run the
Client/server and network computing model:
Applications are stored on a server, downloaded, and executed on networked or
thin client devices such as a NetPC, network computer or PC.
Citrix ICA modelAll applications reside and execute
on the Citrix server, enabling any client device to access the application.
Traditional desktop computing model: In order to
provide access to the latest and most sophisticated applications, the traditional desktop
computing model requires a full-function, fully configured PC. This approach also demands
a sizeable support staff to deploy and maintain applications and to address problems
created when users modify their systems. Since a hardware or software failure on any
individual desktop can render an application unavailable, lost productivity becomes a
major cost factor. As a result, the traditional desktop computing model usually leads to
the highest cost of application ownership.
Client/server or network computing model: In the
client/server or Network computing model, the most common configuration is where
applications and data are stored on the server but downloaded just to the client during
execution. This often generates excessive network traffic and leads to higher network
Lack of network bandwidth can also result in loss of
productivity due to poor application response. This can be particularly problematic for
mobile and remote users. In addition, a downloaded application approach still requires a
high-end client processor, which can preclude an organizations ability to leverage
existing investments in desktop hardware. Other thin-client models dictate that customers
incur the cost of replacing their installed base of obsolete PCs.
Citrix ICA model: A client-independent approach,
such as Citrixs ICA, yields the lowest cost of application ownership of the three
models analyzed. Since applications reside and execute on the server, the time and costs
of installing, configuring and deploying applications to users is greatly reduced. And
since only the graphical user interface (GUI) of the application is distributed to the
client, virtually any device can access even the most sophisticated applications. This
client-independent approach can distribute applications over any network to virtually any
client device in any location and deliver LAN-like performance. It doesnt matter if
users are working on high-end PCs, legacy (386, 486) PCs, Unix workstations, Macintosh
systems or network and Windows-based terminals.
While server-based computing is usually perceived to drive
up network usage costs, this is not the case with the ICA model. Only key strokes, mouse
movements and screen updates are distributed to the client, so high performance is
possible even over low-speed connections. This approach not only reduces network traffic,
it can improve performance and productivity for WAN, internet-connected and remote dialup
users by as much as 10 times using existing network infrastructure. Organizations are able
to avoid the significant costs of network infrastructure upgrades for additional bandwidth
and significantly reduce ongoing data communications service costs.
Finally, users can access virtually any application,
including tens of thousands of Windows-based applications. These applications can be
rapidly deployed across any type of network, including corporate intranets or extranets,
and the internet.
Analyzing TCA elements
As an example, consider a medium-sized enterprise of 2,500 users with 175 users on the
road or working from offices at home. The enterprises application distribution and
management is not automated and the networks are utilized at 65% of capacity. Given this
scenario. The Tolly Group computed per user total cost of application ownership against
the three computing models.
In the case of traditional desktop computing model, the
first year TCA is about $14,000. Approximately $3,000 of this cost was used to acquire
hardware, software and required network infrastructure and to provide end-user training.
Annual recurring costs including technical support, application maintenance and
productivity-related costs came to approximately $11,000. By automating the maintenance of
the application, the annual cost per user could be reduced by approximately $2,000.
Recurring costs remain constant during subsequent years.
The client/server or network computing model requires an
up-front investment to replace existing client hardware. This results in a first-year TCA
of approximately $16,000. Of this amount, initial hardware and software acquisition,
training and network infrastructure costs come to approximately $6,500. Recurring costs
during the first year are approximately $9,500. However, due to lower recurring costs,
this model becomes less expensive than the traditional desktop model from the third year
The Citrix ICA model yields the most favorable TCA of
$6,000. It enables any type of client device to access any application across any form of