#5
Air Date: 12/03/2019

What is Total Cost of Ownership (TCO), and Why Should You Care?

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Can You Afford the Total Cost of Ownership of Technology?

Transcription

Dan: And welcome. It's 8:30. In the house with me from Bit Wizards, it's the tip of the wand today. We have Jason Monroe, he's a Senior Solutions Sales Consultant. Did I get that right, Jason?

Jason Monroe: You did. Good morning.

Dan: Okay. It's a mouthful. Good morning. And also Vince. You know Vince, Vince is part owner of Bit Wizards and thank you for coming in, Vince. We appreciate you taking your time out to come in and talk with us.

Vince: Oh, thank you. Looking forward to talking with everybody today. It's going to be a great day and it's a cold one, too.

Dan: It is a cold... You've got your sweatshirt on and you're all ready to go. Is that Mendoza College of Business?

Vince: Yes, sir. Notre Dame graduate. Notre Dame? Are you a Notre Dame alumni?

Dan: Yes, sir. I am.

Vince: How about... there was a guy used to sit in this seat that was also a Notre Dame alumni. One of my commanders, one of, my first commander in the 33rd Fighter Wing was with the OSS and he was a alumni from Notre Dame as well. Name Polazzo, no. [Genazo 00:00:47 ], Genazo. He was also a County Commissioner. Anyways, welcome to the show and what are we going to talk about today? Let's start out with this.

Announcer: Bit Wizards, bits and bytes.

Vince: So we're going to start out with the news. That's our bits and bytes. Let me do my run [crosstalk 00:01:05 ].

Dan: What's the news today, Vince?

Vince: Well, the new today is Monday was Cyber Monday and online sales are on track to hit $9. 4 billion or 18.9% year over year growth. So what does that mean for small businesses? Well-

Dan: Get online and sell your stuff.

Vince: Exactly. But that means that every business is now a technology business, right? And that's what this really speaks to.

Dan: They even said, by the way, to interrupt you just for a second, they even said that the brick and mortar are going right along with the internet because you can order online and then go pick it up and their brick and mortar place. So they've gotten together as well. So that means everybody's involved now.

Jason Monroe: Right. It's that instant gratification we're all after. We don't want to wait two days for our package to-

Dan: No. If you can get it down the road. But you can order it at your computer to make sure they've got it and then you run down and pick it up.

Vince: Absolutely.

Dan: And oftentimes they give you a discount when you do that, too.

Vince: Absolutely.

Dan: So, well, yeah, that's the way to the shop. Maybe sometimes you can't go to the brick and mortar. So if you don't, even the smaller businesses can go online and be able to sell on Cyber Monday as well. You don't have to be a brick and mortar. I just meant to say that they are also getting online because it was kind of one against the other for a while and now they've merged.

Vince: Yeah, absolutely. And that talks to sales, but I think also you have to look at it in a broader picture is that it's not just about selling online and selling in brick and mortar, it's about improving your processes. It's about providing an experience for your customers. That includes technology and we've kind of talked about that a little bit before, but I think the big thing is that small and medium businesses have very similar demands as larger organizations when it comes to technology. They just have fewer resources. And so, but keep in mind too, they also have less patience. They need a lot more coddling, a lot more education and understanding. Because think about it, when you're a small business owner, you're frazzled, you're trying to make payroll, you're trying to keep compliant, you've got technology, you're trying to service your customers, you've got a lot of things going on when you're a small business and you've got very little staff to do it. And this is why as a small business, you pick and choose what you outsource and what you don't do yourself and you do the things that you can do yourself.

Dan: And to that point, oftentimes people with a small business may not have the resources within their business to take care of their technology. And that's where you guys can come in with Bit Wizards and be able to take care of the small businesses because how do they compete against the big business that may already have an in-house IT?

Jason Monroe: Well, that's exactly right. I mean, if they're spending time fixing their computer, chasing down why their internet doesn't work, that's time that they're not spending tending to their clients or customers.

Dan: Yes. And so then their competition runs away with it.

Jason Monroe: Mm-hmm (affirmative).

Vince: And what some small businesses don't understand is how difficult it is for the people that are actually in tech, right, to stay current with what's going on. Everybody thinks it's this magical thing that every tech person knows about every single thing. And the reality is, is that there's a lot of different types of tech and that tech people specialize in those different areas. So you can't just rely on one guy or one gal to get it done for you. So what we do at Bit Wizards is we make sure that our people are cross-discipline, have cross skill sets. So they're a mile deep in one or two areas. And then they're a mile across so that they can span the spectrum. And one of the things that we provide that's unique is that we have a team of people to help you. And we had that team of people to help you at the cost of less than what it would cost you to employ one person. A lot of small business folks don't understand to employ a full time IT person costs somewhere between $45,000 and $85, 000 a year. And if they have certain specialties it can get even higher than that. So what we try to do is bring that team of professionals to provide that cross-discipline support and at a cost a lot less than what it would cost you to hire a full time person.

Dan: Absolutely. And to my experience anyway, when you hire an IT person and let's say you have one or maybe even two if you're lucky, they end up having to do other things around as well. They don't strictly stay with IT like, oh, we need this taken care of in the building or they get pulled to do other things where you guys specialize. That's all you do.

Jason Monroe: Right. And we actually have a couple of clients out there that they have IT guys out there. They have an IT guy that might be really good at their network, but they need help getting their firmware or their hardware updated because they may, they're very specific. They're specialized in what they do. So when we can say, " Hey look, we've got a guy that's good at networks. We've got a guy that's good at cloud architect. We've got multiple cloud architects on our team. We've got a guy that's good with Microsoft Office 365, the SharePoint environment, things like that." We can tap each one of those resources and gain that knowledge that we need right there. We don't have to go looking anywhere for that knowledge.

Dan: Yeah, and the guy that's, like you said, if you have one that's really good at one area, or maybe kind of like you're talking about, Vince, where you have a couple of people that are knee deep into one area but maybe a little bit off across the board and that's who you hire, well then you've got to find somebody else that's a specialist in something you may need. And you've already got that on your team.

Vince: Absolutely. And to Jason's point again, we augment people that already have an IT person and help make them a hero by providing them the extra depth that they may need to get things done depending upon your size of business. For some businesses we do it all. For some of them we augment their existing team and do the heavy lifting or the fill in the gaps where they need help.

Dan: And even if they don't have a full time IT, you can log in. We talked about this before. Bit Wizard, you can log in and take care of issues without even having to be there.

Vince: Yeah, that's a great point because we, I don't know if we've mentioned on the show before, but we signed a contract with Heartland Steel. And Heartland Steel is a national company and we do managed IT services for them. They're located in Lodi, California. They're located in Grand Rapids, Michigan. They're located in Columbus, Ohio. Our tech support guys span from Pacific time all the way over to Eastern time and provide support and managed IT services for their team across that spectrum and multiple locations all-

Dan: And you do it real time.

Vince: Yes sir.

Dan: And that's cool. So you don't have to wait for somebody to come in. You can log in and do it real time. You have a problem? Take care of it now.

Vince: Absolutely and you're not futsing around trying to get things done yourself, look up things, find out things. You call a professional that knows what things they need to do, but they still have to troubleshoot some of those things. It may take a little bit of time to do it, but far less time than it would take for you to go try to figure it out for yourself. Your time is better spent doing HR, servicing your customers or things like that.

Dan: Absolutely. That gives you more time to spend on your business. And it's kind of like the way the world's going now. I mean, everybody has their specialty. Why not employ somebody who is special to do what you need done so you can work your business the way you not to work your business? That just, to your point before of having to hire an IT up to $80,000, that's not going to cost you $80, 000 to employee Bit Wizards. So you're already money ahead and you're getting professionals as a team versus one person.

Vince: Absolutely.

Jason Monroe: And something else we bring to the table as well as our certifications. We do make sure that all of our IT help desk engineers and our cloud architects, things like that, have those certifications. So those small businesses, I'm not really sure if they've ever taken a look at something like a PCI compliance or if they're a health organization, they take a look at HIPAA compliance. We've got all those knowledge bases in our team as well. So if someone has a question about something like that, we can quickly answer it, point them in the right direction. We make sure that we're paying attention to the changes and keeping them compliant with those certifications.

Dan: Yep. Well, and that's good to know because, like you said before, even if you already have an IT guy, you might have the specialist for HIPAA or whatever it might take to help out with that as well. So it's just one hand working with the other to make sure that everybody's above board and you don't have problems going down the road because if you don't stay current on things with technology the way it is, the way I understand it, a year behind the power curve and you could lose information, you could lose business and you're not at the tip of the wand, if you will, like a lot of other businesses would be that hire you.

Vince: Yeah, absolutely. And you know those certifications, one of our core values a Bit Wizards is part of our DNA is to be a lifelong learner. And so when you're in technology, you have got to constantly reinvent yourself. And that's what our team does. They stay up to date. They constantly are getting educated and we try to work with them on both sides. Not just the technology side but also the soft skills. You want a friendly IT person on the other side, somebody that's going to listen to what you have to say, what your problem is and then adequately troubleshoot the problem technologically to get you a resolution.

Dan: Makes good sense to me.

Announcer: Bit Wizards, what's up our sleeve?

Vince: Well that rolls into a new area that we-

Dan: What's up that sleeve, Vince?

Vince: Well I think today we want to talk a little bit about, we've been talking about what it costs to own, or to, that every business is a technology company and that you need people that are skilled to go and do this. And that factors into something that a lot of businesses don't understand, which is something called TCO or total cost of ownership. And so just like your car, you go out, a lot of people think, well, when I buy a computer I'm done. Right? That's the cost. Well, it's really not. It's just like when you buy your car. When you buy your car, you pay for your car, right? But you've got to change the oil, you've got to put gas in it, you got to pay insurance, you've got your annual tag and fees in it. And if you let any one of those things go, your car is not effective if you're not able to use it. You could get a ticket, there, you could be fined. There are lots of things that could happen to you, the consequences of not taking care of it. Well, the same thing is true in IT. And when you factor in, what do I need to do? When I buy a computer, there's the hardware and the software costs there, but then there's the patching, the maintenance and security that goes along with it. There's the training of the individuals to use that particular computer and the ongoing maintenance. So there's a lot of things that go on on that. So what we try to explain to people is what does it really cost to own a single computer? And one of the facts out there is is that the average unmanaged PC that you have costs about $5, 000 a year to, if you're not managing it. If you're managing it, that cost cuts to less than half around $2, 300 a year. So just keeping it up to date, making sure that things are correct and that type of stuff that goes along with it.

Dan: Is that like patching, making sure that it's up to date with the software and if you have to upgrade any hardware, whatever that might be, that's what you're referring to obviously.

Vince: Absolutely. And then the other little problems that come along, if you think another statistic that's out there that is that the average employee spends at least 30 minutes troubleshooting a computer problem, whether it be working with software. Well if you've got 10 employees, right, 30 minutes each in a week, that's five hours of lost productivity.

Dan: Yeah, I could see that because a lot of us are just smart enough to get into trouble when it comes to computers and then we've got to figure our way back out of it again. But if you have somebody that can, okay, you did this, we can fix that. You're done. Other than us trying to figure out, okay, well what did I do or what did I hit that made this happen? So I fully understand that.

Jason Monroe: Sometimes it's as simple as why won't this document print? I mean we've all been there. And you can either pick up the phone and call Bit Wizards or you can try to figure it out yourself. There's nothing more frustrating than trying to figure out why a document won't print.

Dan: Oh yeah. Tempers get up pretty, pretty high when that happens.

Vince: Well, especially if you've got something going on, like you've got that proposal that has to get out to a client or you're trying to, you've got a customer standing in front of you and you're trying to print a receipt. Right? That's a big deal, right? I mean, think about the impact to and the impression that that leaves with that customer. If you can't do something as basic as print a receipt for the customer, right?

Dan: Yeah. Or like you said, a proposal or it could be an estimate or whatever it might be.

Vince: Yeah, I mean and printing is a simple fact, but we all know that technology is inherently more complex and we, interfacing with a computer, there are a lot of different things that can happen. There's a lot of different points where things can fail. You've got your internet service provider, you've got your internal hardware and software, you got the individual, the human factor. There's a lot of different things that can happen into it. And that's what we try to provide when we're working with customers.

Dan: We see that a lot just in our building here because oftentimes everything will be working great one day. You come in the next day and just like you said, something won't print. Okay. What's changed? Nothing's changed, but something changed. I don't know if it's a person that hit the wrong key or something happened in the intranet within the building something.

Jason Monroe: Update failed. Something.

Dan: Yeah. Yeah. It's just so odd. But other than us trying to, okay, because we're not techies, we don't know what's going on. It's a hit and miss thing and so finally somebody might get it right and you'd be able to print with one computer on the printer when you need 10 of them to print. So, oh yeah, we love you guys when you can take care of that.

Vince: Well, and it's that inherent, the whole purpose of computers, computers and software are tools for us, right? And they try to hide the complexity to make things easier for us to do. But when that complexity's hidden, it makes it very difficult to go to try to troubleshoot and figure out why does that not work? Did a new patch come out that broke that? Well, somebody would say, " Well, why did you patch the computer?" Well that patch, right, was a security update that kept you from a particular vulnerability. But unfortunately not all the vendors that are out there all stay hip at the same rate, right? So you may have a hardware patch that came out that breaks a piece of software because the software vendor hasn't had enough time yet to figure out what that vulnerability is and patch the software. Whereas the hardware vendor may have already done that. So this is why these, this ghost in the machine that everybody's always worried about, the smoke and mirrors, that's what our job is to do, is to understand what those things are. And it's not just actually, we don't always know exactly what needs to be done, but we know where to look, where to find it, and how to narrow it down very quickly, which saves you time, effort, and money.

Dan: Gosh, yeah. Well that's what you guys do. I mean, that's your specialty. That's what you're trained in. You're educated in it and we're not. And so to be able to have somebody with that kind of knowledge is just a bonus for the rest of us.

Vince: Well absolutely. And with Bit Wizards, you get a team of certified professionals that are available to you Monday through Friday from 7:00 a. m. to 7:00 p. m. Central time. And then if you need us for an emergency call after hours, we've got people on call ready to take those calls for emergencies for those that work on weekends or have after hours. And it's for less than the cost of employing one full time IT person.

Dan: Oh yes, yes. And like you said earlier, when you update your machines, that's something you always do is you make sure when they employ you, you take care of their machines and everything's updated, the patches are all updated, you make sure the software is just talking to the software and the hardware and everything works out. So you guys prevent those problems, basically.

Vince: We do. We absolutely try to prevent those problems and make sure that you're up to date. But even doing some of those things like we talked about, sometimes they will cause problems and we try to minimize that because we try to test the patches and the items before they actually come out, which is what large organizations do before they roll out patches and do things and make sure that things are updated. The biggest thing that a small business can do to keep themselves secure is keeping themselves patched and up to date.

Dan: Like with the Windows updates for example.

Jason Monroe: Absolutely because when those release notes for those patches go out, they go out to everybody. So if they're plugging a hole, a security hole, those notes are also going to all the hackers and the less... what's the word I'm looking for? Trustworthy of us.

Dan: The bad guys.

Jason Monroe: They're now saying, " Oh, I didn't know that happened and now I'm going to go figure out how to exploit that security hole." And if you haven't updated your computer, that security hole still exists, so...

Dan: So they can kind of rummage around inside your computer, see if there's anything they want to keep or they can use and make money on your behalf. And then they do all that kind of thing. And getting back to that, I guess Windows 7 that's going out this next month, right? That's goodbye. It's not being upgraded anymore or updated or supported by Windows and now it's going to be all 10. So people that don't have 10 now probably ought to be thinking about getting to 10 as soon as possible.

Vince: Absolutely. And then within 10 there are certain updates that Microsoft is driving people to do. In the past it used to be optional to do updates within the operating system and Microsoft is now trying to be more proactive and basically drive those updates on a regular basis. And fortunately, as an IT organization, we have some ways to sort of prevent that a little bit and then decide when we want to do them.

Dan: Oh I see. And then on top of Windows 10 there's the 365. And the 365, that's updated on a regular basis, right?

Vince: Yes it is. And so it's not just the patching and updating, but they're also rolling out new features because that's, as we've talked about before, is a software as a service, which allows them to put new features, new updates into the software much quicker and much faster. It used to be you bought Office and then maybe you got four patches a year or four updates a year. And then you may have some intermittent security updates that come in between. Well now they're pushing out updates weekly.

Dan: So with the 365 it's a onetime deal but you pay out on a monthly basis so I understand. Is that right?

Vince: That is correct.

Dan: But you'll never have to get another Windows.

Vince: That's, well you'll never have to get another Office 365 or your Productivity Suite.

Dan: Because that's going to be constantly updated rather than go from seven to 10. The 365 I guess is going to be what your final purchase is, I mean as of now anyway.

Vince: As long as you continue to pay your subscription. Microsoft is going that way longterm for the operating system as well. So the next level is going to be your operating system, which is Windows itself as a service. So what will happen is instead of buying Windows with your machine, you will buy a subscription and then that ongoing update. A lot of people don't understand it really. It costs a lot of money to keep technology updated and patched and stuff. So the a lot of the vendors are providing are switching to an as a service model or a pay as you go model.

Dan: Yep. And I can see the advantage to that because then you're not having to try and catch up. You're always staying current. I like that idea.

Announcer: Bit wizards, from the spell book.

Dan: What's the spell today?

Vince: Well we're going to talk about a term. Since we started off with Cyber Monday, we're going to talk about a term called PCI DSS or Payment Card Industry Data Security Standards. And so what that is is it's a set of policies and procedures for people that take credit cards to protect the end users or the credit card holder's information and also protect you and the credit card company from liability. And it was created by the four major credit card companies, Visa, MasterCard, Discover and American Express. And anybody that takes credit cards is required to be a part of these standards or to comply with these standards.

Dan: Because I know most people, if they're like me, when you buy something and you throw your credit card number out there, you're always wondering, is this going to be something that's going to be used against me later? Are they going to keep my number? Are they going to buy things with my name? Identity, if you will, and use other things with your credit card. So this is what you're talking about right now is keeping that secure.

Vince: Absolutely, and it's a standard that's out there. It's kind of organized in levels, levels one, two, three and four. And it's based upon the volume of transactions that the person or company that takes credit cards does. Right? What they have to certify, what they have to do to maintain compliance. Some of them are basic things like do they actually store credit card data? So when you, some websites you'll see they have, they don't actually store the credit card information. What they do is they pass it through to a credit card processor. Sometimes when you do PayPal, right, you'll see a website. That owner of that website never touches your credit card, never stores any of your credit card information. It's simply passed through electronically in real time via your secure connection to PayPal where PayPal does your credit card transaction. They store off that credit card information and they have a much greater PCI standard that they have to meet in order to do that.

Dan: You always figure PayPal is pretty secure because they have to get the money right up front before they release the money. That's kind of the way I understand it.

Jason Monroe: Well and that leads into a point. With all the online shopping, especially around the holidays, putting your debit card, because I know I swipe my debit card at Publix or whenever I go buy groceries, like it's going out of style. But whenever I shop online and I know a lot of us do this, I always tend to use a credit card. A credit card is going to give you, if someone, if it's compromised, the credit card company is going to get on it quicker than your bank might. And especially you don't want that compromised debit card number out there where the criminals got access to your bank and all of a sudden you're getting notifications that, " Hey, why did my mortgage check bounce? Why did my... ?" And then you've got to go back and fight with the bank to get that money back. So shopping online, even on PayPal, you put your credit card in. It's just the best practice.

Dan: That's the safest way to go because you can always cancel the transaction. But once they drain your bank account, then you got a problem.

Vince: Yeah I don't, I just as a tech guy, I don't ever use my debit card for any financial transaction anywhere other than to go to the ATM and get money out. Everything is done for me via credit card because I've got a different level of security that comes with the credit card. If I dispute a transaction that immediately is credited back versus if it was done with a debit card, they immediately could clean out my entire bank account. So as a rule, I don't do that and I make sure that all of my, I turn on two factor authentication for all of my bank accounts, that where they have that. And I also make sure that I keep a password phrase, a much longer password phrase that it makes it harder for people to crack my password.

Jason Monroe: Right. And another point when dealing with the PCI DSS is we know we have some clients out there, some businesses out there that are doing recurring billing as well. And if they're not using something like a PayPal or a credit card processor, let's say they're storing that data in an Excel spreadsheet and running it once a month or something like that, that is definitely something you should reconsider. You don't definitely don't want to store people's credit cards, debit cards on your system.

Dan: If it gets hacked then all their information gets taken.

Vince: Well, and that's a huge liability for your business when, if that happens, right, because you're the one that's ultimately responsible because the agreements that you signed with MasterCard, Visa and Discover to take credit cards says that you won't store that information, that there are certain processes and things that you have to do. PCI DSS is one of them and that's one of the things that we try to do at Bit Wizards depending upon your industry, make sure that we know what are the different types of compliances you may have to be compliant with like PCI, HIPAA, NIST, GDPR, E-privacy or ADA compliance. And then we take a proactive approach to make sure that you stay compliant with your IT and your electronic measures.

Dan: So if you have, let's just say you're shopping online and you get to a website and you have to give your credit card information out and it goes to the website. What's to keep people from hacking into your computer for getting that information as it's being sent?

Vince: Well what happens is is that the, depending upon how the person who programmed that particular website sets up the connection between you and the credit card processor, most of them require what's called SSL. And you have to have a certain certificate and then things are encrypted point to point from where you put it in on your page to how it is transmitted to the bank or to the payment card processor.

Dan: Okay. So somebody's hacked into your computer and maybe they are, they have access to your computer somehow? And I guess there's hackers that can do that. If you're buying something online, can they see that?

Vince: Well, yes, some can. If they can do what's called a key logger or something like that, which is why there are other security measures. A key logger is something that as you type it picks up what you're typing in. So what they will try to do is they'll try to get access to your computer. Then they will find ways to watch what you're doing until they know. Because you know a lot of people don't realize that credit cards have a formula to them. So if you know what those formulas are, you can predict whether a number, a certain number of digits and how they begin, whether it's a MasterCard, Visa, American Express, whatever it is, and whether or not that's a credit card. You're typing it in. The hacker's actually watching what you're typing in, they're getting that. Now they've got your credit card number. So security happens at a lot of different levels. A lot of things have to be in place in order to ensure that you're secure.

Dan: So when you go into somebody's computer and you're, so let's say they come to you and say, " Okay, we want you to take care of our small business computers." Is that one of the things that you look at very closely to make sure that doesn't happen?

Jason Monroe: Oh, absolutely. I mean we are monitoring for any type of software that's running that should not be running. And that includes key loggers, screen captures, things like that.

Dan: Gotcha. And to close out of the program, Vince, we're running a little bit short on time. I know you'd like to talk about somebody.

Vince: Yeah, absolutely. I want to give a big shout out and thank you to our customer, Lisa Jo Spencer, Attorney at Law and her team. Yeah, Lisa Jo is awesome and a lot of people know her in the community because she is a life director at the Greater Fort Walton Beach Chamber of Commerce. But her practice, they provide probate and guardianship and estate planning and they're a customer of Bit Wizards. And we appreciate Lisa Jo, Jesse and the team out there and thank them for their business.

Dan: I know Lisa. She's a good person. Well, you guys are great, too. And I thank you guys for coming in.