Technology | February 21, 2019
Apple in Business – ROI and TCO, Part 1
The aesthetics of Apple devices and the number of fans of the brand certainly are impressive; however business decisions such as the implementation of infrastructure based on Apple devices should be based on completely different premises. Hard data such as TCO or ROI matter here. Without it, it is impossible to prove that the decision to invest in Macs or iPhones is rational for the company. I will try to point out the most important elements which prove that the use of Apple devices for business purposes can be a profitable investment.
To start with, let’s sum up which elements are the most relevant if we would like to compare different models of IT architectures based on devices and software from different manufacturers. The most important indicators for my comparison will be the total cost of ownership (TCO) and the return on investment (ROI) mentioned in the introduction. When it comes to computer hardware, the following factors will have the most important impact on these indicators:
Hardware Total Cost of Ownership consisting of:
- The cost of devices
- Loss of residual value
- The cost of the operating system
- Potential costs associated with outdated software
- Additional software license costs
Return of Investment depending on:
- Savings on the delivery of devices
- Savings on device management
- Savings related to security management
- Increased employee efficiency
When I was writing this article, I tried to use as much hard data as possible – first of all in the scope of real financial values. However, it quickly turned out that a comparison of similar values such as the price of devices can be very difficult.
Due to the number of models and versions differing from one another in terms of technical parameters and price, as well as the fact that the minimum functionality of the device means something completely different at each company, I had to limit myself and provide an estimate of the percentages only. However, it seems to me that such values allow us to form our own opinion and to make it reality at our company.
The cost of devices
Common opinion holds that Apple devices are more expensive than devices from other companies. However, these products are becoming increasingly available at prices comparable to other devices in this class. In addition, Apple offers a few ways to reduce the cost of purchasing equipment. One of them is the co-financing of the purchase of equipment by an employee. In exchange for bearing some of the costs, he can buy the equipment after a certain period of use. An advantage of this solution is the fact that the employee cares for such equipment as if it were his own, which reduces the risk of damage and breakdown.
Programs such as Apple Financial Services allow customers to reduce the cost of purchasing equipment, enabling the leasing of devices, software and Apple accessories for 12, 24, 36 or 48 months. The entire amount of the lease can be included as a tax-deductible cost, which allows you to lower your tax base. After the rental period, the equipment is returned to the reseller and exchanged for a new device.
The total rental cost of Apple Financial Services can be up to 30% lower than the market value of the device.
It should also be remembered that Apple devices maintain their value much longer than devices from other manufacturers. Both supply and demand are responsible for this state of affairs. Compared to PCs, there are fewer Apple devices on the market, but there are also many more people willing to buy them – even if the equipment is used or damaged. This affects the high residual value of Apple devices, i.e. the price at which you can resell used equipment, which is definitely higher than other devices of the same age.
The cost of the operating system
Apple has a policy that all devices are always sold with the operating system pre-installed on them. This means that all Apple users can update the operating system immediately without any additional costs right after the release of the newest version.
In the case of PCs, the operating system is sold independently, which means that many devices run old or outdated versions. A similar problem occurs with Android phones, despite the fact that they have the ability to update the software. The reason is that a large number of phone models use the Android system and every one of them can have completely different technical parameters. Android developers have made it so users are accustomed to the fact that the next versions of the system will have greater hardware requirements, which often leads to problems with operation in the case of cheaper devices. Many users disable updates, fearful of slowing down the device or even damaging the system and losing data.
Read more: Is It Profitable to Use Macs in Business?
Security of software
One of the key principles of IT infrastructure security is regular software updates. Without them, even the best system will become vulnerable to attacks sooner or later. Apple’s strategy of providing all users with the latest version of the operating system has brought the intended effect in this respect. The last version of iOS from September 2018 had been installed on 78% of devices as of January 2019. In the case of Android, the Marshmallow version from October 2015 still remains the most popular (21.3% of devices), and the Android Pie, which was launched in August 2018, could not even exceed the level of 0.1% which would allow for entry to the Android development platform.
If we compare macOS and Windows, the results are similar. In February 2018, two years after its release, Windows 10 managed to eclipse the market share of its most popular predecessor, Windows 7, reaching 42% (neither Windows 8 from 2012 nor its later update Windows 8.1, failed to do so). However, this means that almost half of all users are still using an older version of Windows. In comparison, the latest version of macOS Mojave from September 2018 was the most popular version of the system after just three months (in December 2018), with a share of 32%.
Additional software license costs
Apple devices are delivered with a full set of the software which is necessary to start work, so there is no need for the additional installation of tools such as antivirus or office management software. Thanks to access to applications in the App Store, this basic functionality can be further developed with additional tools. Most importantly, applications available in the App Store, both free and paid versions, are verified for security and compatibility with devices running the latest version of the operating system.
In the case of PCs, the hardware requires additional costs for software licenses almost every time, especially devices for commercial purposes.
In the second part of this article, which will appear in two weeks’ time, I will discuss the elements that affect the ROI for the implementation of Apple devices in the company’s IT infrastructure.