Total Cost of Ownership (TCO) of social technologies is a calculation to help consumers & managers assess costs, both direct & indirect, as well as any benefits related to investing in social technologies. The goal of TCO is to determine a financial figure that reflects all costs of a purchase whether big or small, hidden or otherwise. Costs associated with the investment of social technologies include service and support, networking, security, user training, & software licensing, etc.

Once the TCO is determined it must be compared to Total Benefits of Ownership (TBO) to determine whether the product is worth investing in in order to get the best Return On Investment (ROI) . This is the financial benefits from investing in social technologies. There are many ways to compute the ROI and the intangibles are sometimes most important, but also the most difficult to quantify because they are often long term and integrated with other purchases.

How Is the TCO of Social Technologies Determined?

There are several factors involved in determining the TCO of social technologies for educational institutions. The first thing one must look at is the percentage of the institution’s overall budget dedicated to technology. James MacDonald, deputy head and former IT Coordinator of Yokohama International School, states an educational institution’s IT budget should be 5-7% of its overall budget (MacDonald, 2009).

Zucker & Light (2009) would distribute that money in the following way for a smart classroom:

Of course every institution will need to adjust these percentages and line items to fit their own needs when purchasing social technologies, but this chart serves as a reference point for determining TCO. How much of each of these percentages are social technologies going to take up from the budget?

When determining the TCO for social technologies institutions will have to pay particular attention to:

Integration of platform to support new social technologies with current IT network structure
Increased staff (both technical and editorial) to build and maintain the platform and design the site
Increased infrastructure (servers, storage, bandwidth, etc.)
Utility and maintenance (biggest cost for using Google Wave)
Increased Electricity

What Are The Issues Associated With Social Technology TCO?

It is very difficult to generalize cost structure across institutions for the following reasons (Bates, 2000):

There is no definitive costing structure - Different institutions may view costs differently.
Each social technology will result in a different TCO due to different fixed and variable costs.
How social technologies are used may vary – Is the technology going to be used in a blended learning situation or in a full e-learning/distance education situation? The cost of these vary considerably.
The time spent developing, administering, and supporting the use of the technology is difficult to gauge – Salaried professionals who do these tasks also perform other duties.
The social technology may be shared between different functional units.
It is difficult to determine indirect and overhead costs.

Determining the TCO for Wikis and Google Wave

The issues related to the TCO of social technologies will be illustrated using Wikis and Google Wave as examples:

	Google Wave - by Monica Campbell	Wikis - by Craig Wehrle
Infrastructure	Google Wave provide adequate infrastructure that has revolutionized messaging, communication, information sharing and publishing. This sharing and publishing of data can be done in text, pictures, videos and graphs/tables. The product is open source with supporting platforms that enable anyone to access and use its services. The infrastructure of Google Wave allows users to have all their communication in one network; this is a reduction in the cost of time spent to visit all other social network. Time means money.	Two choices of infrastructure: 1) Design, Create & Host, Your Own Wiki Many line items are already in place, but needed items are: A) A wikisite (example MediaWiki) - Many are available (and free) for comparison B) A package of independently created programs installed on computers called WAMP (Windows), LAMP (Linux) or MAMP (MAC). This includes: i) Web server such as Apache or IIS - required to send the generated pages to your web browser; ii) PHP - a widely used, general-purpose scripting language. required to run the software; iii) MySQL - Database Server required to store the pages and site data C) RAM - 256MB minimum D) Extra storage - 40GB minimum E) Domain Name - Costs vary with each registrar - can get it for as little as $4.95 (U.S)/Year but must be careful because prices vary and a lot of hidden fees - Can be as high as $100/Year - Yearly renewal fees - Names that end with a country’s two letter national suffix may cost more 2) Wiki is Hosted By Outside Server & School Administers It Reduces time spent on designing, creating and maintaining the wiki Free Option - Limited size & less security options - increases issues(and time) for site administrator Upgrade purchasing & yearly renewal fees available - more protection & viewing limitations Example 1 - PB works:unlimted workspaces for 1000 users for $799/year Advantages are limited set up time, advanced access control, & hidden and locked pages Has Campus Dashboard - performs tasks such as creating workspaces in bulk, reducing administration time Example 2 - Wikipaces - For $6000/year Higher Education institutions have unlimited users and security & viewing protections
Set-up, Support & Administration	Google minimizes data center operations costs by using homogenous hardware and specialized monitoring software. Google Wave is supported by browsers and platforms such as chrome, safari, fire fox and an administrative team to ensure functionality.	How much of the 32% of the tco spent on service and support outlined by Zucker & Light should go to setting up and administering the wiki? Once the site is set up the administration is especially important to consider: How much time and effort must be paid out to an employee/employees to monitor the safety, create user groups, add, delete & manage users, create pages, etc.? If you look at the set up of this module as an example you can see Jeff Miller worked on Module four`s wiki pages for 5 days during the Month of May. He made an average of ten changes each time and spent an average of about 49 minutes on the wiki each time (averaging the time between the first saved change to the last saved change for each day). While this is probably a lower figure than reality it does allow us a starting point to think about how much time an administrator would spend on the technology.
Training	Navigating in Google Wave does not require scholastic training besides thousand of online videos are available to coach users how to successfully and effectively navigate their way in the programme. Training would include navigating, clicking, dragging, editing searching, embedding, and use of keyboard-keyboarding skills, interacting and interfacing with people in cyberspace. In addition to free video training Google also hosts advance training at a cost to participants who have interests in becoming more technically adept. Click for full agenda and details and here for Click here to Book this course and here for Google Seminars for Success	Users will have to be trained, but the technology is quite simple to use Can be done by: 1. A member of the staff trains colleagues – salary of employees must be factored in. Is the service part of their job or is it extra work requiring extra salary? 2. Informal professional development - could be encouraged so teachers help and learn from one another in an informal way. Zhao & Frank (2003) claim that this informal method of training is more effective but determining the true TCO may be more difficult. 3. Training is outsourced – much more expensive
Depreciation	• Depreciation is it here to stay, or might it change drastically or disappear within a buying cycle? Google Wave will experience changes has it is in the developmental stages. The parent company Google seek to ensure quality standards and this will help the value of Wave to appreciate instead of depreciate. The flexibility and cutting edge trends in Google Waves will ultimately increase the value to consumers. In the past four years Google has been making profits ranging in the 7oo million dollars per quarter that is an indicator of the success of the company which can guarantee sustainability.	Won’t depreciate in value in same way a hardware or software purchase would Depreciation would be on hardware items (storage) paid out Also, time spent on the site if other technologies compete or replace it Institutions might stop using services or put effort into another enterprise resulting in the wiki being forgotten or removed from the server and the space allotted to other technologies
Intangibles	An interactive, innovative teaching learning tool Free for the consumer Flexible Open to all teachers and students Allow learning institutions & parents to keep abreast of students’ progress Google minimizes data center operations costs by using homogenous hardware and specialized monitoring software.	While there is investment and time needed for wikis, they allow educational institutions to deliver content to students in a constructive, collaborative way. Wikis allow students to build knowledge together regardless of the style of e-learning in the class. Students can be in the same classroom, at home doing their homework, or thousands of miles apart and they can still collaborate, an essential requirement to modern learning.

NOTE: Although social technology developers want consumers hooked on using social tools to help them provide competition, increase awareness of the product brand and to capture the market and increase their market value, these developers reward consumers with free use of the product or usage at minimal cost.

Report Card Rating

Overall wikis and Wave have a good TCO because the cost of the line items are quite low when you consider what they can accomplish educationally. The goal in today`s education is to have students construct knowledge together and work collaboratively, and technologies such as wikis and Wave assist with these goals. To use them are quite easy and requires little training for the students and teachers. The overhead costs are quite low with extra storage being the one of the biggest individualized hardware expense. Other overhead costs are bundled in with other technology purchases.

The biggest costs, overall, are going to be administration, teaching and technological support of the wiki site, but this can also be bundled in salaries and time for labour of other technologies and duties, so the gauging the full TCO of these items will differ for each organization (Bates, 2000).

Another consideration is the fact it is much easier to identify costs of delivering teaching entirely at a distance through new technologies because it can be isolated as a separate activity, but it is much more difficult to calculate cost of using technology to support regular classroom teaching because integrated with other costs (Bates, 2000). Having said that, the educational benefits of wikis and Wave make the overall costs worth it for institutions that are serious about teaching using modern strategies and philosophies.

Discussion Question

Based on the examples of Wikis and Google Wave is the total cost of ownership (TCO) of social technologies low enough to get a good return on investment (ROI)?

External Resources and References

Apple Inc. (n.d.). Wiki setup overview. Retrieved from http://docs.info.apple.com/article.html?path=ServerAdmin/10.5/en/c4ws5.html

Bates, Tony. (2000). Managing technological change. Jossey-Bass Inc Pub.

MacDonald, J. (2009). Personal Interview. Retrieved from http://economicsofedtech511.pbworks.com/Reading-1%3A-The-Economics-Of-Educational-Technology

Pruszko, C. Setting up a free web or wiki server – at home, in school, and on the internet [PDF document]. Retrieved from Lecture Notes Online Web site: http://eroosevelths.pgcps.org/pruszko/PUWTWebWikiServer%20handout.pdf

Zhao, Y. & Frank, K. (2003). Factors affecting technology uses in schools: An ecological perspective. American Educational Research Journal, 40(4), 807-840.

Zucker, A.A. & Light, D. (2009). Laptop programs for students. Science Mag, 323, 82-85. Retrieved from http://www.idrc.ca/uploads/userS/12381700641Zucker_and_Light_2009.pdf

Course:ETEC522/2010ST1/SocialTechnologies/Total Cost of Ownership