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To: Chuzzlewit who wrote (44604)	5/24/1998 10:49:00 AM
From: rudedog	Read Replies (1) \| Respond to of 176387

chuz - Here again the argument works for a single purchase but not for a continuous series of purchases over time. Corporate IT would be more similar to fleet management, to use your example. The value of having air conditioning would have to be weighed against the cost of maintaining a fleet where some vans had air and others did not, and where the service procedures for the vans could not be as easily standardized. The initial capital costs for the big IT department purchases are typically less than 15%, and factors like servicability and asset management are more than double that at about 35%. Therefore the benefits of standardization over a period of time far outweigh any potential benefits from the features of an individual purchase. If these IT departments bought all or most of their machines to support the front end of the usage curve, then they could get the benefits of increased productivity, increased utility life and also standardized service models. But then the capital cost would (over time) nearly double for the whole mix of systems in service. The economics just don't support that kind of increase to capitalized equipment, the depreciation expense would more than eat the benefits.