Posted by: Anonymous Coward
on July 08, 2002 07:48 AM
> The analysis will show that it means nothing in the big picture for an alleged 8 million dollar saving for a company with an 10 billion dollar annual revenue.
So, you add the word "alleged", and compare the savings to the revenue of the entire company, and the savings look small.
Nice try, but you are fibbing, in more ways than one.
First, you should really be comparing the savings to the company's profits, not revenue. In a heavy industry like steel, most of the revenue goes to covering the costs of raw materials.
If we assume that NKK's profit is 10 percent of revenue (and that's being very generous in an industry like steel), then your $10 billion revenue becomes $1 billion profit.
Now, we see that the $8 million in savings represents a 1 percent increase in profits. That's looking better.
But wait! Let's go back to the original article, and see what it actually said:
> For example, starting in a few months, NKK will introduce a new general-purpose computing system that will handle all 118 production lines AT ITS HUGE PLANT IN THE CITY OF KAWASAKI. Based on its internal cost of ownership study, the company expects to save over $8 million a year in licenses, support and administration costs. [emphasis added]
Yes, contrary to the implication in your post, this is the savings for only one plant, in one city. Thus, your comparison of the savings to the revenue OF THE ENTIRE COMPANY is even less accurate.
The article says there are more savings to come:
> The company's Fukuyama operations are undergoing a similar changeover.
Plus, as the article states, those are only the direct, easily calculated savings for "licenses, support and administration." They didn't mention the other likely benefits, arising from increased reliability, greater flexibility, faster deployment, the ability to run the same software across multiple platforms, and so on.
But the best line in the article is the one you were hoping your distraction would keep us from noticing:
> Its initial studies suggested the firm would save as much as 40% a year in IT costs.
Yes, a 40 percent savings in IT costs.
***FORTY*** PERCENT SAVINGS!
JUST FROM USING LINUX!
If every department in the company could find a way to reduce costs by 40 percent, some might think it a good thing. But you would advise against it, of course, since, in each case, its only one department, and the savings are small compared to the revenue of the entire company.
Learn about Linux
Download Linux
Get Linux help
Very clever FUD. Now the truth.
Posted by: Anonymous Coward on July 08, 2002 07:48 AMSo, you add the word "alleged", and compare the savings to the revenue of the entire company, and the savings look small.
Nice try, but you are fibbing, in more ways than one.
First, you should really be comparing the savings to the company's profits, not revenue. In a heavy industry like steel, most of the revenue goes to covering the costs of raw materials.
If we assume that NKK's profit is 10 percent of revenue (and that's being very generous in an industry like steel), then your $10 billion revenue becomes $1 billion profit.
Now, we see that the $8 million in savings represents a 1 percent increase in profits. That's looking better.
But wait! Let's go back to the original article, and see what it actually said:
> For example, starting in a few months, NKK will introduce a new general-purpose computing system that will handle all 118 production lines AT ITS HUGE PLANT IN THE CITY OF KAWASAKI. Based on its internal cost of ownership study, the company expects to save over $8 million a year in licenses, support and administration costs. [emphasis added]
Yes, contrary to the implication in your post, this is the savings for only one plant, in one city. Thus, your comparison of the savings to the revenue OF THE ENTIRE COMPANY is even less accurate.
The article says there are more savings to come:
> The company's Fukuyama operations are undergoing a similar changeover.
Plus, as the article states, those are only the direct, easily calculated savings for "licenses, support and administration." They didn't mention the other likely benefits, arising from increased reliability, greater flexibility, faster deployment, the ability to run the same software across multiple platforms, and so on.
But the best line in the article is the one you were hoping your distraction would keep us from noticing:
> Its initial studies suggested the firm would save as much as 40% a year in IT costs.
Yes, a 40 percent savings in IT costs.
***FORTY*** PERCENT SAVINGS!
JUST FROM USING LINUX!
If every department in the company could find a way to reduce costs by 40 percent, some might think it a good thing. But you would advise against it, of course, since, in each case, its only one department, and the savings are small compared to the revenue of the entire company.
#