Wednesday, October 25, 2006

Maintenance costs - plummeting like memory:

In the 1970's and 1980's, there was a rule of thumb about maintenance for electronic devices: you should expect to pay about 1% of the list price per month on support and repair costs. You could do that regularly via a maintenance contract, or you could take your chances and pay the same in occasional catastrophic repairs. Here's a simple application of this rule, in a conversation that was typical for those times:

"Wow! They're remaindering a Line Printer that cost $50,000 for $500. Should I buy it?"
"Well that remainder price is cheap, but you should expect to spend about $400 per month to maintain it. Can you afford the maintenance cost?"
"No, I guess not."

Today we expect a lot of hardware to last for years, maintenance free. Everyone has a shock-story about a product that really let them down, but the relative lack of tubes, wires, hand-soldering, overly complex boards and moving parts has changed the face of maintenance, and the normal cost has plummeted.

I know you appreciate not having to pay ten cents for every memory bit you own. Now think about how maintenance has gotten astronomically cheaper too.
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