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The Cost of IT: A Journey through History and Future Projections

This report from the Dept. of the Senate analyzes the financial evolution of IT costs over three fiscal years and reflects on the historical progression of computing technology. Starting with the SAGE system in 1957, which cost $10 million, the document highlights major advances through the decades, culminating in anticipated costs and capabilities for 2007. With significant drops in PC costs and increased processing power on the horizon, the report questions where savings should be reinvested—into improved services or elsewhere?

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The Cost of IT: A Journey through History and Future Projections

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  1. The cost of IT:A meander down memory lane and a peek at what’s on the horizon

  2. Dept of the Senate • 5 IT staff (including 2 dedicated to web publishing) servicing approx. 500 users • Cost of the IT Section over last 3 financial years: • 2003-04 $439k • 2004-05 $442k • 2005-06 $405k

  3. Long, long ago….in 1957 • SAGE AN/FSQ-7 - used 55,000 vacuum tubes, about ½ acre(2,000 m²) of floor space, weighed 275 tons, at a cost of $10m • $121m in today's dollars • 0.024 MIPS

  4. …in 1977 • IBM 370/168-3 mainframe, 6 MB of memory, 32KB of RAM, 12.5MHz, cost of $4m • $16.5m in today's dollars • 1.52 MIPS

  5. …in 1987 • HP 3000 Series 950, 32 MB RAM, 13.7 MHz, 6.6 MIPS, cost of $390,000 ($780,000 in today's dollars) • Digital DEC VAX 8530 supermini, 32 MB $445,000 ($890,000 in today's dollars) • Dell PC 386-16, 1 MB, 16 MHz, $5,800 ($10,500 in today's dollars),

  6. …in 1997 • SUN Ultra 450-300 x4, workgroup server, 300 MHz, $50,000 ($62,000 in today's dollars); 2,219 MIPS • Dell Dimension XPS D266, 266 MHz, $2,500 ($3,100 in today's dollars)354 MIPS

  7. What can we expect in 2007? • PCs of $900 (and falling rapidly) • 3.2 GHz dual processors, 1024 MB RAM, 80+ GB hard disk memory • 5,000+ MIPS • RW DVD standard • Myriad of portable storage devices and remote communications options

  8. Back of the envelope calcs • 500 PCs in 2007 will cost $450,000 • in 1997 PCs of vastly inferior quality cost the department $1.55m in today’s dollars • the decrease in annual depreciation expense is around $350,000 per annum

  9. Where is your share of the IT savings going?Back into improved services and infrastructure or somewhere else?

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