Computer Hardware
Historically the processing power of a computer has been measured
by the number of instructions the computer could process in a unit
of time, usually measured in MIPS (millions of instructions per second).
Grosch's Law
In the 1940's Grosch noticed that if a machine of processing power
of 1 MIPS cost $1, then a machine with twice the processing power
only cost $1.50 [reference 9]. This observation was canonized in
the literature as Grosch's law and was the economic basis upon which
all computing power in an organization was centralized. A recent
study [reference 10] initially showed that this trend had reversed.
Additional analysis concluded that the cost of computers still follows
Grosch's law, but that computers are now segregated into 5 cost
categories (see Figure 1). This study provided the economic explanation
for the decentralization of computing power that is currently underway
in industry. The study concludes that:
- A viable computer for a particular task should be selected from
the least cost computer category, i.e. the most economical computing
is done in the least cost category.
- The computer purchased within the category should be the largest
affordable, since the incremental cost of processing power, or
MIPS, is reduced by the square of the cost.
The most recent review of Grosch's law concludes that the mainframe
category should be divided into two cost categories: IBM and IBM-compatible
mainframes, and non-IBM mainframes. The study determined that "All
else being equal, an IBM or IBM-compatible CPU will cost more" [reference
11].
