A few years ago, a friend of mine, a guitar whiz in his own right, demonstrated that if you changed the tempo and sped up Led Zeppelin’s "Stairway to Heaven," you got "A Taste of Honey," popularized by the Beatles and Herb Albert. It’s amazing how things change when they slow down a bit. A similar change of tempo seems to have come over the e-business arena, and it’s certainly giving everyone a chance to catch their breath and reflect on the music a bit more. Just a couple of years ago, all signs pointed to a tidal wave sweeping over established businesses as the whole world moved to online services. Banks, stores and universities would be ravaged and made obsolete. Companies scrambled and poured billions into costly enterprise application integration and e-business development efforts.
Now, many of the dotcoms may have burned through their billions and crumbled, but established businesses quietly continue to come online in droves. And, partially due to the economy and partially due to the dotcom fallout, companies have grown more cautious about their e-business investments. I even recently heard one analyst remark that, because of the dotcom backlash, "People have slowed down, to take a more deliberate approach to Internet services."
Don’t worry; e-business isn’t going to lose steam anytime soon. An industry survey from AMR Research finds that, if anything, e-business and e-commerce spending continues to accelerate. Nine out of 10 companies will continue to sustain, or increase, their e-business initiatives through 2001. It’s just that our priorities have shifted. Unlike the lady in "Stairway to Heaven" who thought, "all that glitters is gold," companies have learned that all the e-business glitter isn’t necessarily gold. However, rather than emphasizing e-business as a revenue channel in and of itself, as has been the case, the technology is creating a nimbler, smarter infrastructure to support all channels. Infrastructure has become sexy.
That’s why Web to host can be a compelling sell and quickly retrievable investment for many organizations. In many cases, Web-to-host deployments can quickly show organizations the money.
The most recent numbers available are from Tolly Group, a research and testing organization in Manasquan, N.J. This group puts the annual cost for a traditional terminal emulation user on a PC at about $8,000, half of which is downtime. However, a Web-to-host deployment lowers the TCO to just over $3,800 per user. A big chunk of this 50-percent-plus savings is in improved productivity, since no end user time is lost in application installation and maintenance.
Of course, this formula simply reflects the base savings for replacing a current PC-based terminal emulation client with a Web-to-host browser. The savings go much further than that. Some other factors to consider in Web-to-host ROI include the following:
The flexibility of being able to deploy mainframe access to any location, such as a home-based office, may help reduce turnover costs. With average replacement costs exceeding $5,000 per employee, this can add up. If your operation previously lost 100 employees a year, but 50 now stick around because they have more flexibility in where they do their work, that’s a savings of $250,000.
Opening up your data and systems to remote locations, outside partners and end users may help increase supply chain efficiency. Since every trading arrangement is different, it’s hard to put numbers on this. Some industry experts, for example, say that moving trading relationships online can reduce costs by about 15 percent.
Adding users requires more MIPs, but mainframe MIPs are getting cheaper every year. The cost per MIP in a mainframe operations center has declined dramatically. GartnerGroup estimates that this cost has dropped from $72,500 per MIP in 1993 to about $14,000 today.
Deployment of a Web-to-host solution provides a browser view to 3270 data without changing the MVS or OS/390-based code. Other approaches to Web-enabling mission-critical applications, such as re-engineering legacy software, tearing up systems, building from scratch or re-platforming applications to Web-enabled middleware, can take months or years, and run into the hundreds of thousands, and even millions, of dollars.
If your organization is involved in a merger or acquisition, Web-to-host access offers a means to quickly get employees in the new organization online with your operations. Employess will be able to access customer account data, financial information or human resources systems.
No question about it, heavy investments in e-business will go on as companies seek to increase efficiency, expand market opportunities and improve customer relationship management. As those dollars are closely watched, Web to host may just bring you the ROI that will please the most discerning bean-counting executive. And, such results end up tasting much sweeter than wine.
Joe McKendrick is an independent consultant and author, specializing in surveys, technology research and white papers. He can be reached at email@example.com.