IT Costs Matter Even More to Smaller Businesses

In the video below, Dr. Howard Rubin discusses his latest analysis of IT costs. He points out how critical it is that smaller businesses make the right technology choices, because IT costs typically make up a larger share of their revenues compared to larger businesses. IBM's new z114 — and, I would add, hosted mainframe cloud offerings — present the most affordable opportunities ever for smaller businesses to achieve much the same IT scale efficiencies and cost savings that larger businesses enjoy.

by Timothy Sipples August 23, 2011 in Economics


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And when IBM comes up with an affordable 110V 200 mip mainframe for authentic small businesses(as defined by SBA) at a price point under $10K complete with software and all relevant hardware, the prattling about small business will be believable.

Posted by: mainframe truth | Sep 5, 2011 8:04:22 AM

That's a ridiculous argument. Here's why:

The price for a *single* CPU of Oracle Enterprise Database is $47,500 plus maintenance.

If a small business has an annual IT budget of $10K, then that business ought to be either increasing their budget or not running their own dedicated IT (to any substantial degree). There are plenty of cloud-based and Software as a Service providers, across all platforms at various SLAs, that would be much better than in-house IT in that situation.

And how on earth does a small business manage to buy (or at least rent) a delivery truck for $10K? It's not possible. Yet thousands upon thousands of small businesses buy (or lease) their own trucks, for a lot more than $10K.

Don't be silly. If you want a piece of hardware for less than $10K, IBM has several different models to choose from. They just aren't trucks (i.e. mainframes), and you won't be able to do much with it. (Ever tried hiring even one U.S. IT person for $10K, even part time?) However, *many* small businesses can afford to get started with mainframes -- many more than ever before in history, even when run in-house. But if your budget is $10K for IT, don't do your own (business) IT.

Posted by: Timothy | Sep 5, 2011 9:05:18 PM

Small businesses can buy and install respectable servers for 10K in base hardware and software costs without any problem whatsoever. There was no discussion here about overall IT budgets, just base acquisition cost.

It would be helpful to have a definition of what constitutes a small business. The SBA's definition is expressed at . It seems like IBM defines a small business as being at the highest end of the SBA's parameters, not the lower end.

Posted by: mainframe truth | Sep 7, 2011 1:42:54 PM

Businesses (of any size) cannot buy even a single license of Oracle Enterprise Database for $10K, nor can they buy trucks. That doesn't mean trucks are bad, and it doesn't mean that trucks aren't relevant to small businesses. They're highly relevant!

IBM has introduced the lowest price mainframe in history, and significantly so. That's just fact, and that's a good thing. And they're also priced a lot lower than most trucks. As I said in another thread, I don't know anybody who's upset about that with the possible exception of IBM's competitors.

Posted by: Timothy | Sep 7, 2011 9:27:32 PM

Has anyone heard if Kaplan’s MBA is any good?

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Posted by: Trader Jobs | Sep 26, 2011 6:43:59 AM

not all banks out there are lending, but there are still a bunch that are. And if you've got a good business, bad economy or not, chances are you'll win out in the end.

Posted by: excel classes | Sep 29, 2011 3:24:56 AM

It seems that IBM's position regarding genuine small businesses(as opposed to IBM's fake small business conception) is an elitist one, largely related to the definition of IBM's mainframe market as 'businesses who have money to burn on expensive and dubious service offerings'. I can't think of a sane authentic small business who would tolerate the Oracle extortion, any more than they would tolerate extortive and wasteful spending on other products and services.

The benefits of mainframes directly managed and run by authentic small businesses are obvious. Running an entire business' computing requirements for the most part on one or two servers is a compelling notion from a cost and management perspective. Perhaps one day IBM will be a genuine participant in helping real small businesses grow from a startup to a large enterprise without wasting a business' time, effort,and money on inferior technologies like the wintel monopoly, unix/linux, and similar distractions.

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Posted by: body contour Perth | Nov 28, 2011 5:23:04 AM

Of course it matters to small business, they cant generate much income to support IT services in their offices.
Not that much of hard math.

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