When considering the whole system (hardware, software, network and applications) isn’t the cost of the hardware negligible?

Hardware cost is just a fraction of total system cost, although it must be noted that the cost of storage is an increasing porting of hardware cost. This has given rise to some new storage approaches (SAN for Storage Area Network and NAS for Network-Attached Storage). And hardware cost is far from being negligible for high-end systems.

Just because hardware cost is reducing does not mean that choice of hardware is irrelevant. Indeed, the choice of a platform sets compatibility constraints within which the company will have to live for many years; migrating to another platform brings costs and risks. As indicated in some earlier FAQs, hardware costs and, even more, price/performance continually decrease. Software prices have also dropped significantly, although not to the same degree, because of the volume effects (compare the price of proprietary operating systems to those of UNIX and NT).

The price reduction in software has been less than for hardware because standardization of software is much less than for hardware. It is worth noting that well standardized fields generally show very low prices (operating systems, for example), while more fragmented domains see much higher prices, offering comfortable margins to their vendors (as with cluster-based systems).

It seems likely that current software trends (such as free software, Java, software components, etc.) will drive software cost erosion faster than in the past. This will drive the major portions of IT expenditure towards exploitation: integration, operation, administration, safety, performance tuning, and so on.

Source of Information : Elsevier Server Architectures 2005


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