Wireless LANs: Assessing Total Cost of Ownership: Page 2

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Capital costs represent only 11% of the total. End-user operational costs are the biggest chunk at 47%. Admin costs represents 16% and IT operations 26%.

Most important, the TCO for a W-LAN in this scenario is 15% less than the TCO for a wired LAN.

In the LAN extension scenario, TCO for the W-LAN is $3,052. This reflects assumptions about how the wireless connections are used - only 20% of the time - and the fact that the rest of the time, users are on an established wired LAN.

Calculating an ROI in the LAN extension scenario is more difficult, Redman says.

"It's soft dollars - being able to be available for messages wherever you are, carrying on with collaborative work when you move around, the fact that you could continue processing when you go into meetings. There are ways to monitor these uses. But it's very difficult to quantify."

Vertical Apps Offer Best ROI

Gartner has done little detailed work on ROI on W-LANs, but Redman says the best ROI cases are in vertical applications such as retail, warehousing, transportation and healthcare.

For example, one Gartner client was able to reduce warehousing staff by 20% by deploying wireless bar code readers that relayed information directly back to a database application over a Wi-Fi network.

And a hospital showed that connecting intensive care patients to wireless monitoring devices and letting them get out of bed and move around sooner ultimately saved money. It has long been observed that patients recover more quickly if they can get out of bed sooner. The faster they recovered, the faster expensive intensive care beds were freed up.

Redman cautions that Gartner's TCO calculations cannot be applied where the scenario is markedly different from the one Gartner used - more or fewer users, for example.

Nor will the calculations remain accurate forever. As technologies and corporate practices change, so will TCOs. "This is one snapshot in time," Redman says of the current W-LAN calculations.

Companies that want to plug in their own variables and do a custom TCO calculation can buy the Gartner W-LAN TCO model, Redman points out.

Still, even without doing a custom calculation, it's useful to have some quasi-scientific and disinterested testimony to back up claims that wireless LANs can cost less than wired LANs and provide a good return on investment.

This article was first published on 802.11 Planet, an internet.com site.


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