Friday, July 27, 2007

Acquiring PCs In Today’s Rapidly Changing Market (01jun97)

June 1, 1997

One of the questions we frequently are asked is whether an organization should purchase new PCs now or wait since performance keeps going up and prices are coming down. Obviously, one answer does not fit all situations. The right solution depends upon the age and configuration of existing hardware and the software you are currently using or would like to use.

In general, however, we believe that architects and engineers should be provided with the latest equipment an organization can afford and that older units be moved to people with less demanding tasks. It is somewhat shocking to find that many technical people have better systems at home than they have at work.

Too many financial managers believe that they are saving their companies money when they hold off upgrading systems that have not yet been fully depreciated. It does not take a large improvement in the productivity of an professional who costs $80,000 per year including benefits to justify a new computer that might be an order of magnitude faster than what is currently being used.

The Price/Performance Explosion

The accompanying table tracks the typical PC one could buy for about $3,000 during the past five years. We have used Gateway 2000 for this data since that company has been very consistent in its product offerings. For the past decade or so, the guideline in the computer industry was that price/performance doubled every two years. Welcome to 1997 where it appears that this ratio is doubling annually. A number of factors have caused this change:

  • Intel has significantly improved the performance of its microprocessors to the point where they compete effectively with all except the best RISC processors used in UNIX workstations.
  • In order to maintain its market dominance, Intel has aggressively priced its new microprocessors. When the Pentium first came out, a 60-MHz version sold for nearly $1,000. Less than four years later, a 233-MHz Pentium II (see related article in this issue covering this new microprocessor and some of its competitors) sells for just $636 in similar quantities. This is nearly an order of magnitude increase in price/performance during this short period of time.
  • The huge volume of PCs sold has resulted in incredible economies of scale. While less than 500,000 UNIX workstations will be sold this year, over 80 million PCs will be shipped worldwide.
  • Memory costs have plummeted. Until about 18 months ago we were paying about $50 per megabyte for DRAM memory. Supply caught up with demand and prices dropped to under $10 per megabyte. Machines with 64 MB memories are readily available for less than $3,000. In many cases, a large memory can have a more significant impact on performance than microprocessor speed. Likewise, disk storage costs have also dropped like a rock.
  • Graphics accelerator cards have come down in price to the point where the PC manufacturers include them in the base configuration.

Getting The Most For Your Dollar

Having spent a fair amount of time watching the PC evolve, we have a few suggestions on procuring new PCs.

  • You are better off buying a system somewhat below the top-of-line and then replacing it more frequently than you would if you bought a more expensive system.
  • Install plenty of memory. Most CAD and GIS packages thrive on memory and at $8 to $10 per MB, you can easily afford 64MB or even 128MB.
  • Do not ignore a high performance backup device. With 3.2 GB disks commonly used today, we recommend a 4 GB cartridge tape drive.
  • Buy the entire system from one source. Your time is too valuable to be spent configuring hardware and software for your computer to work.