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| GartnerGroup Intranet and Workgroup Cost Study Shows Impact of Economies of Scale |
| Stamford, Conn., May 24, 1999 -- Gartner Group, Inc. (NYSE: IT) has released a summary of the GartnerGroup study, "Workgroup and Intranet Computing: Cost of Operations." The study examines costs in 303 organizations using workgroup and intranet products: Lotus Notes; Microsoft Exchange; Microsoft Internet Information Server (IIS); Netscape SuiteSpot or Enterprise Server; and Novell GroupWise. The findings reveal that smaller firms are at a competitive disadvantage because they lack the economies of scale of larger firms. An organization's size is more predictive of the cost than its usage pattern, the product implemented or any other variable tested. The study examined a number of factors that contributed to variations in the "annual cost of operations per user" between enterprises. For the entire sample, the median cost was $276 per user, per year. |
| Among the factors measured, the one with the greatest impact on cost is the size of the user group. This is because there are more users over which to amortize some of the fixed costs in larger installations. For example, organizations with more than 1,000 users had a median cost of $130 per user per year, and organizations with 50 to 300 users had a median cost of $738 per user per year. |
| "Many organizations have little idea what the 'typical' costs are to support messaging or intranet infrastructures," said study author Chuck Stegman, a managing vice president with GartnerGroup. "These findings can be useful benchmarks for organizations looking to compare their costs with those of other organizations." |
| "This study can be useful as companies weigh options such as fine-tuning IS practices, consolidating user groups or outsourcing," according to GartnerGroup Vice President and Research Fellow Tom Austin, lead analyst on the study. |
| Other statistically significant factors include the usage profile (highly interrelated with the product category), the product category (Web server, messaging-oriented or Lotus Notes), the percentage rolled out and the time since initial installation of the product. Although the sampling strategy was tuned to pick up product differences, the variations measured within product categories were not statistically significant. (For example, the study did not detect statistically significant variations in the Web server category between the Netscape and Microsoft offerings.) |
| A detailed management summary of the GartnerGroup "Workgroup and Intranet Computing: Cost of Operations" study is available at www.gartnerweb.com/public/static/consulting/wicms.html. |
| About GartnerGroup |
| As the world's leading authority on information technology (IT), GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community serving Fortune 1000 companies from 80 locations worldwide. GartnerGroup's unique capabilities and resources help bring clarity to the direction of the world's hottest and most volatile industry. |
| CONTACT: |
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Carol Wallace GartnerGroup 203-316-3575 carol.wallace@gartner.com |
