total cost of ownership: XO versus computer lab

Tony Anderson published his calculations for total cost of ownership of an XO compared with a computer lab in a long and sometimes acrimonious thread on olpc news:

his results:
OLPC: 4.5 cents per hour
computer lab: $2 per computer access hour

If he's correct then that's 40 times more value for money roughly speaking :-)

Here are his calculations:

Surprise! TCO for XOs in schools is $437.50 (4.5 cents per hour)

I have attempted to recalculate the TCO based on a more realistic description of the OLPC model, but using the numbers in the report.

The TCO model in the report is based on teaching ICT in a public secondary school. The purpose of this training is to prepare university-bound students to enter a course of study leading to a position in the computer field. Assume that the school enrollment is 160 students. The study assumes 3.5 hours lab time per day, 5 days per week, for 39 weeks per year (10920 available hours per year). Shared among 160 students for an average of 68.25 hours per year per student or 1.75 computer access hours per week.

The OLPC model is based on each child having an XO throughout the class day and at home on evenings, weekends and holidays. It is also focused on primary school education. Assuming a school of 160 students, at least 160 XOs will be needed. Assume a steady-state situation in which each child entering the school in the second grade gets an XO. Each child keeps his XO throughout the primary years (grades 2 thru 5 as assumed in the study). The school purchases an additional 5 XOs per class to provide for loss, damage, repair, incoming transfers, and the teacher. In addition the OLPC model assumes a dedicated computer (XS) per school which provides internet access, provides backup for the XOs, caches instructional materials, and supports a CMS (Moodle). Each child has a computer which could be used each day for six hours in class and two hours at home (plus ten hours on weekends). This is approximately 1800 hours per year - let's assume 1000 hours.

First, look at the direct computer cost, excluding initial setup, training, connectivity to the internet, electricity, and Tier 1 (software) support.

Case 1: Public Secondary School (grades 9-12) sets up a computer lab with 16 desktops (one is also a server) to teach ICT. The total cost is $8000 with a per seat cost of $125. This is a approximately $0.40 per hour for computer access ($125/312).

Case 2: Public Primary School (2-5) provides each child and four teachers with an XO. The initial purchase for this school is 160 + 4 (teachers) + 4 (reserve) for a rounded-up total of 170 at $200 each ($34000). The annual buy is 45 laptops at $200 per student ($9000). A dedicated server per school costs $500 (headless mainstream desktop). This is a total cost of $34500 ($216 per student). If we assume utilization of 1000 hours per year, the cost is($216/4000) or 5 cents per hour. Note: if leaving students keep their XO, the cost in the first four years is $34000 + $27000 (3 * $9000).

Other costs:

Case 1 the computer lab pays $33886 total for initial setup ($5351), training ($10620), software support ($10920), hardware support ($2432), electricity and internet connectivity ($5351), and damage and theft ($2640). This increases the computer lab cost to $2500 (41886/16) per seat and approximately $2 per computer access hour ($41886/16/4/312).

In case 2, the costs of Tier 2 and 3 (hardware maintenance) and the costs of damage and repair are handled by purchasing extra XOs. In the OLPC case the extra cost is $28314 (excluding $5072). The OLPC total cost is $70000 ($41500 + $28316). This is $437.50 per student or 4.5 cents per hour.

Posted by: Tony Anderson on September 29, 2008