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Is computing really cheaper now?

By Jean-Claude Elias - Jun 12,2014 - Last updated at Jun 12,2014

Equipment is cheap, but is computing, generally speaking, inexpensive too?

Every now and then the IT industry likes to remind us that the price of hardware keeps going down in a rather spectacular manner, while performance is increasing dramatically at the same time. The specialised media is full of these little comparisons that are made to impress us.

Examples: Memory used to cost $5,000 for a miserable 512KB chip circa 1985, and is now $50 for a 4GB module. This shows that, roughly speaking, memory is a million times cheaper today than it was in 1985. One also remembers the old famous quote by one of the IT industry gurus who, after being criticised by an automobile industry top executive, replied: “If the auto industry had done what the computer industry has done in the last 30 years, a Rolls-Royce would cost $2.50 and get 2,000,000 miles per gallon.” It may be true, but there are hidden facts about the actual costs that cannot be ignored.

Hardware, or equipment if one prefers, is cheap but hardware today is the tip of the iceberg that constitutes the global cost of computing, whether we are talking of smartphone or a big computer server machine.

When you add up the price of software licenses and upgrades, the various subscriptions to the Internet, the regularly scheduled replacement of old units with new ones, the cost of antivirus programmes, and perhaps before anything else the cost of the technical support and service you need to maintain the equipment in good working condition, the final bill becomes a huge one.

For a typical laptop, and assuming you only use legal software licences (how could it be otherwise?), these will cost you an average of 50 per cent of the machine’s initial price. In some cases, when you also buy original applications like Adobe Photoshop or Sony Vegas for audio-video editing, your software bill would exceed and by far the price of the laptop. It does not end here. Software makers are good at making you need and want upgrades at regular intervals. If minor upgrades often are free, major upgrades will make you pay non-negligible amounts of money.

Internet is almost everywhere, but except for hotspots at the public places you go to or at your friends’ access to the web is something you pay for in the end, one way or another, even if it’s through your phone’s 3G network.

Another hidden cost is the multiplicity of devices we all operate today. Until around 2005 one computer at home and another one at work would be enough. Now smartphones, laptops and tablets everywhere significantly add to the global cost, for they don’t come free of charge in the first place, and of course they also need licences, service, repair, etc…


But there’s some good news — very good actually


Whatever we’re paying, regardless of any comparison with 20 or 30 years ago, computing is a most feasible activity. The benefits, the advantages cannot be overestimated. E-mail has made the cost of stamps nil. Communication networks like Viber, WhatsApp and Skype save us incalculable amounts. So as to get the best out of Skype I buy credits that let me place calls from Jordan to regular phones abroad through the celebrated service that has been Microsoft’s property since 2011. A $10 coupon keeps me going for about six months. There are various subscription formulas available, but a call to a US-based phone costs me $0.017 a minute!

The countless web services are invaluable. When you pay $10 a month for 100GB of online storage (DropBox for example) it is wiser not to whine and to see what you’re actually getting for your money instead. Annoyed by the ads that you see on your Gmail? Remember that Gmail is free.

With fast web connections IT technical support today can often be performed remotely, saving everybody time and money that would otherwise have to be spent in transportation, not to mention the speed of getting things fixed quickly.

And did I mention the cloud? It alone justifies any money spent on it.

Therefore price comparison with “yesteryears” is totally irrelevant. Hardware prices have gone down in an unthinkable way while connectivity, services and licences are now costly. But all this wouldn’t mean a thing without taking into consideration what we are actually getting. And we’re getting a lot, a whole lot.

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