The High Price of PDAs

If you think a PDA is a relatively inexpensive way to go mobile, think again. Gartner, Inc. estimates that an enterprise’s total cost of ownership (TCO) for each device can approach $3,000 per year. When additional hardware, software, support, service costs, and a wireless modem are included, the TCO rises to $4,392.

Gartner breaks out the various costs for an integrated wireless PDA:

  • 60 percent of the cost will go to capital (this includes hardware, software and network services)
  • 30 percent to operations (this includes technical services and support, peer support, application management, and development)
  • 10 percent to administration (includes evaluation, implementation and training)

“When assessing the total costs of wireless mobile products, we found that the more capable the device the higher the cost. The more processing power it has, the more applications it can store, leading to higher support and operational costs,” said Phil Redman, research director for Gartner. “Beyond typical costs for a mobile device, there is an additional and recurring cost element for wireless connectivity.”

Gartner advises enterprises to seriously calculate the return on investment (ROI) and the total benefit of ownership (TBO) before outfitting employees with PDAs. Significant ROI factors would include an increase in productivity, leading to increased revenue; increased accuracy because of constant communication and decreased costs; and eliminating redundant processes or even basic costs.

“ROI is possible for many mobile applications, but enterprises that proactively link mobile technology investments to job functions and bottom-line productivity indicators, such as sales revenue, customer support an internal operations goals, will be successful at defining a mobile ROI, as long as TCO is also understood,” said Redman.

But despite the high cost, META Group is predicting enterprise PDA penetration rates of 10 percent to 15 percent, with most end users purchasing their own devices and bringing them into the company, and expects the penetration rate to exceed 50 percent by 2006.

Furthermore, META expects more devices to be distrubted to users at company expense, with 15 percent to 20 percent of workers receiving a company-furnished PDA by 2005. Before handing out the PDAs, META advises companies to establish clear guidelines for who can obtain an enterprise-furnished device so that corporate systems are not overly burdened when dealing with a $300 to $500 purchase.

META outlines some of the costs associated with synchronization that will enable use of offline data (mobile portals, business information, data sheets), as well as connectivity to enterprise applications (sales force automation, ERP, business intelligence):

  • $25 to $50 per user for companies to standardize on a generalized synchronization package and make it available to all users
  • $100 to $150 per user for a server-based synchronization process, with prices dropping to $75 to $100 per user within one or two years

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