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The 'Hidden' Cost of Computers

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Three years ago, the St. Paul's School in Brooklandville, Md., had five computers. According to Mark S. Curtis, the school's director of computer studies, extended warranties were purchased for three of the systems at a cost of about $600.

The next year, with 10 computer systems, school officials "limped along" without extended-warranty coverage to protect against malfunctions, Mr. Curtis said. The independent school of 730 students, he added, was "lucky"; maintenance costs did not exceed $200.

But when Mr. Curtis began lobbying for a computer for every eight students, he recalled, "It became obvious that we could not afford the $200-per-machine cost for a maintenance contract."

Like many of his counterparts around the country, Mr. Curtis--who now has 65 computers to oversee--has discovered that there is a down side to the computer revolution: the hidden, and usually unbudgeted, costs of maintaining the equipment. And like others, he has had to figure out ways to cope without spending more than his school can afford.

A 'Sizable' Investment

"When you have a handful of computers floating around, your potential risk is minimal, but if you get 100 computers in your school, that represents a sizable capital investment, and you'd better be willing to back it up," said Mr. Curtis, who credits his school's regular preventive-maintenance program with cutting down on the cost of repairs. "You don't buy a house without enough working capital to maintain it because then you end up losing the value of your investment."

P. Kenneth Komoski, executive director of the Educational Products Information Exchange, which evaluates computer materials for schools, agrees.

"Maintenance is just something schools are going to have to attend to more systematically than they have in the past," he said, "because the number of computers in schools has doubled in the past year and by all accounts it will double or close to double on an annual basis for at least the foreseeable future. Computers are going to represent a very large capital investment."

"I think," he added, "that the issue has to do with the rather unsystematic entrance of computers into schools. A lot of them were purchased with 'found,' money--parental money, grant money, or perhaps even gifts from computer companies themselves. A lot of computer buying has been hurried. It's quite apparent to anyone who looks at the field that schools have not thought about the most important thing before buying computers, software, so it's not surprising that they haven't thought about the real cost of maintaining these machines."

That realization, Mr. Komoski and others note, will "come home to roost" as the initial warranties run out and the systems begin to break down from age and heavy use.

The Lexington, Mass., school system, for example, bought its computers with a one-year warranty. "In the past we've had no problem, but we're running out of warranty on a large number of machines,", said Frank P. DiGiammarino, the district's administrative assistant.

"In our system, because we've only had computers about three years, we don't have any great down time [during repairs]. I would say that in about 10 buildings in any given day we're lucky because we only have two or three machines that are down."

"But," he added, "we do envision a problem in the future as the machines get older, because we give them heavy use."

Noted I.G. Lakey, maintenance and telecommunications manager for the Houston Independent School District: "Most of the problems are with mechanical devices, such as printers and disk drives. We are experiencing more frequent failures on the older machines because of the heavy use and components that age over time, just like an old television set."

Several Service Options

When school officials purchase computers, the manufacturer ordinarily provides a 90-day warranty. When the warranty runs out, however, school officials are faced with choosing from among a variety of ways to service their machines.

One option is to wait until a machine breaks down, then take or send it to a service center or local dealer, and pay for parts and labor--a proposition many officials say they find prohibitively expensive.

"One problem can be as much as $100, another as much as $200. You put a couple of those together and you can buy a new computer," said Stephen R. Johnson, executive vice president of sales and operations for Computer Doctor, a service business with outlets in New York City, Connecticut, and San Francisco.

Another option is to purchase either an annual service contract from a dealer or an extended warranty offered through the dealer from the manufacturer. Several school officials report that these contracts can run from $100 to more than $300 per year per machine, depending on the system configuration, vendor, and special options, such as on-site service and next-day repair.

For example, mbi Business Center Inc., with locations in Virginia, the District of Columbia, Maryland, Philadelphia, New York, and Atlanta, charges 9 percent of the total system cost for an annual carry-in contract, and 12 percent for on-site service and the use of a "loaner" computer to replace the one being repaired. Discounts are offered for large purchases. A school that buys 10 to 14 machines, for example, receives a 20-percent discount.

Computer Doctor offers a $288 annual contract on a standard Apple setup, including 64 kilobytes of memory, dual disk drive, monitor, and printer. An annual contract for an ibm personal computer with 256 kilobytes of memory, dual disk drive, and monochrome monitor costs $336. The company charges extra for a printer.

The company also charges about 20 percent less for courier service and 40 percent less for carry-in service. School discounts are available based on the number of units serviced, with 25 units receiving a 15-percent reduction.

And Computer Craft, with locations in California, Oklahoma, Tennessee, and Texas, offers a manufacturer's extended warranty on the Apple with 64K for $150 and on the ibm pc with 256K for $350. Computer Craft also offers an inhouse annual carry-in service contract on the Apple for $200 and on the ibm pc for $313. On-site service costs $332 for the Apple and $723 for the ibm pc.

Alternative Approaches

In an attempt to beat the high cost of outside servicing, however, many school officials throughout the country are exploring other alternatives.

The Houston Independent School District, which has more than 5,400 computers, set up an in-house maintenance program three years ago after a study showed that by 1985 it would cost $900,000 annually to subcontract all maintenance work--an underestimate, one school official said, because the system has acquired more machines than initial projections indicated.

Patricia Sturdivant, associate superintendent for technology, said the program, with $250,000 in operating expenses per year, represents about 10 percent of what it would cost to contract with outside servicers.

The six-member maintenance department provides service within 24 to 48 hours, Ms. Sturdivant said, and provides "loaner" computers.

The staff's electronic telecommunications system enables schools to report hardware problems promptly.

At the St. Paul's School, Mr. Curtis and another staff member underwent "level-one" repair training with Apple Computers Inc. Several other computer companies, including the International Business Machines Corporation and Commodore Business Machines Inc., also offer training courses. (See related story this page.)

Mr. Curtis, who was trained to diagnose problems, clean computer parts, adjust disk drives, and replace boards with faulty components, credits the school's preventive-maintenance program with cutting down on the number of repairs. (See related story on page 28.)

The Lexington, Mass., school district, which has 104 computers, 75 terminals, and about 50 printers, brings faulty computers to a retired schoolteacher who specializes in computer repair and charges about $75 to $90 a call.

"We've attempted to get a technician on board to take care of microcomputer repair, but we just haven't found any," Mr. DiGiammarino said.

At an alternative school in Oxford, Mass., that caters to alienated youths, 20 students are learning computer maintenance from an instructor who was given free training by the Digital Equipment Corporation.

In turn, the students have set up their own business and now have service contracts with 10 school districts. According to Michael H. Fields, director of Project coffee (Cooperative Federation for Educational Experiences), as the school is known, the students charge $150 a year plus parts for service on five computers and one printer. School districts that need a loaner computer are charged $200.

Already Obsolete

Complicating schools' maintenance problems is the rapidly changing nature of the computer industry.

School districts that rushed years ago to buy microcomputers manufactured by Texas Instruments find today that the machines are no longer being manufactured. The Apple II has given way to the Apple II Plus and, more recently, the Apple IIe and the Apple IIc. The Commodore "Pet'' has given way to the Commodore 64.

While the bulk of school computers have been purchased in the past few years, obsolescence has already become a problem for the early buyers.

"It's a serious problem and one that school officials need to realize," said Carol McGillin, education specialist with Commodore Business Machines Inc. "The technology is changing so fast and we now have better machines in terms of memory, and graphic and sound capabilities. There is a price for progress."

According to Ms. Sturdivant, the Houston school district "took thousands of dollars' worth of equipment out of our classrooms because we couldn't afford to repair it anymore. When equipment becomes very scarce, the prices for the parts go up and there are fewer technicians who are able to repair it."

"Sometimes," she added, "we redesignate its purpose. We moved our Texas Instruments to beginning programming classes since the machines had limited memory and we knew students in the early classes only needed machines to learn the basic functions."

Mr. Curtis noted that "the first Apples we purchased, ran about $2,000 apiece. Those machines, he said, have depreciated to around $300. ''So here we've got a $300 machine that may cost $200 to service each year. That doesn't make much sense because [an Apple of the latest generation] can be purchased at the school discount price of $850."

"Within the next two years," he concluded, "we might just have to throw away computers because they're too expensive to service, or because they're not serviceable."

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