Don’t Overlook TCO for Ed Tech

6/26/2013 7:14:00 PM
By Tim Kridel

When shopping for projectors, savvy education technology managers know to ferret out the total cost of ownership (TCO) rather than fixating on the lowest price. That’s why vendors are increasingly offering projectors with hybrid designs, self-cleaning filters, and light sources that last 20,000 hours or longer. The time spent calculating genuine TCO can really pay off. For example, one California school district is saving about $50,000 annually after deploying maintenance-free projectors.

The same rigorous analysis should be applied to new types of education technologies. Case in point: the 10 million iPads that Apple says school districts have purchased to provide to their students. That number just got a boost from the Los Angeles Unified School District, which plans to equip all of its 640,000-plus students with an iPad by next year.

The upfront cost isn’t cheap. LA will spend $30 million, and that’s just for the first phase. It’s paying $678 per iPad, so issuing one to every student will cost nearly $434 million. There’s also the TCO. For example, one school board member said he’s dropped and broken two iPads. Some of that will be covered by a clause in the contract that provides free replacement machines for up to 5 percent of the value of the purchase.

LA is paying above retail prices because the iPads come with a case and are preloaded with educational software. Physical keyboards aren’t included, so if it turns out that some students require them, that additional expense has to be factored into the TCO.

Support costs are another potential wild card. LA has supported iPads for at least three years, and that familiarity will help as IT staff learn how much they’ll have to scale up Wi-Fi and other infrastructure, as well as the help desk, to support a mass rollout. Indeed, as Bill Gates said in his recent SXSWedu keynote, “Even [in] just two years, you’re going to spend more on the Internet connection than on the hardware.”

The type of rollout also can affect TCO because devices available to students sometimes have different requirements than those limited to faculty and staff. For example, if a district uses Children’s Internet Protection Act grants to fund student tablets, it has to be able to enforce policies not only when the device is connected to the school's WLAN, but also when it's connected at home or to a public hotspot. If the district doesn’t have a policy-enforcement platform that can be extended to student tablets, buying and maintaining it is an additional expense.

One LA district official said board members lacked detailed information on costs, but the point of this blog isn’t to suggest that LA underestimated TCO. Instead, the goal is to show that calculating TCO is a complex but necessary task because there are a lot of hidden costs lurking below the surface with any major hardware purchase.

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