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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Mike Taylor who wrote (17207)9/12/1997 10:22:00 PM
From: Jerry Heidtke   of 42771
 
Mike,

>Can you give us an estimate on the conversion cost for this project?
>Is there a conversion tool for going from Netware to NT? If so, what
>is the cost?

I can make a rough stab at estimating conversion to NT vs. migration
to IntranetWare in this case: 200 servers in 120 locations, 8,000
users, almost all running NetWare 3.1x.

First, hardware. For IntranetWare, the existing server hardware is
adequate in most cases, perhaps with some added memory, say 32 MB
average at a cost of $200. Perhaps half would also want additional
disk space, say another 2 GB at $500. Probably 10% would need a new
server at $3,000. Total hardware cost is (200 x $200) + (100 x $500)
+ (20 x $3,000) = $150,000.

For NT, nearly all of the servers would have to be replaced. Many of
these are older 486-33's and 486-66's with 16-32 MB RAM (Microsoft
says the minimum recommended hardware for their small business server
is a Pentium 166 with 64 MB RAM and 2 GB disk). I'll be generous and
estimate 150 new servers at $4,000 each = $600,000.

Server software costs: customer has a master license agreement with
Novell, and IntranetWare costs average about $35 per year per user =
$280,000. Note that this cost includes support and product upgrades
to the latest versions whenever they are released.

NT Server competitive upgrades can be purchased in volume for about
$400 per server, and $25 per user, totaling $280,000. The same costs
would be incurred with each new version upgrade.

Labor to perform the upgrade/migration. Assume two people to do the
work @ $70 per hour. For IntranetWare, each site with one server (40)
20 hours each person for preparation, actual upgrades, and fixing
whatever problems come up. For sites with two servers (80) figure 25
hours each person. For sites that get a new server, add 8 hours per
person to set up the hardware and move the existing data to the new
server. Updating client software takes about 1/2 hour each. So, (40
sites x 40 hours) + (80 sites x 50 hours) + (8,000 clients x 0.5
hours) + (20 new servers x 16 hours) = 9,920 hours, at $70 per hour
totals $694,400.

For NT, it gets more complicated. Server upgrades can't be done "in
place" over the existing NetWare 3.x operating system, so even in the
cases where the existing hardware is adequate to run NT, there is
extra time involved. I would add 8 hours per person per server, giving
(40 sites x 56 hours) + (80 sites x 66 hours) + (8,000 clients x 0.5
hours) + (150 new servers x 16 hours) = 13,920 hours, at $70 per hour
totals $974,400.

The above doesn't include travel and related expenses, which would be
roughly equal in both cases.

So we have:
IntranetWare NT
Hardware $150,000 $600,000
Software (1 yr.) $280,000 $280,000
Labor $694,400 $974,400
-------- --------
Total $1,124,400 $1,854,400

Now, the ongoing costs. The entire IntranetWare installation could be
managed by perhaps six people, taking care of server software
maintenance and configuration, user account and security management.
An NT installation would take at least twice that, because of the lack
of a directory service. These are not contractors or consultants
(hopefully), so have an annual cost of perhaps $80,000 each.
Therefore, assume that administration will cost $500,000 per year with
IntranetWare, and $1,000,000 per year with NT.

Hope this helps. I've tried to be fair and conservative in these
estimates. They are based on actual experience in large enterprise
environments.

Jerry
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