by Joe Gleinser
3. August 2009 20:00
As a business asset the typical network infrastructure is valued at investment less depreciation. All design, installation and configuration costs are written off immediately. Is this a fair assessment of the value of the network?
On Forbes.com today a model for assessing the value of public/social networks is presented. They postulate that value of a network is "the net value of each user's transaction summed up for all users." Can the same valuation be applied to business technology systems?
For many social networks the business IS the technology. You can't separate Facebook or Twitter from the application and infrastructure behind them. They are completely integrated. Can the same be said to modern business technology systems?
Most modern businesses can not function independently of their technology. Business processes have been defined, human resources selected and prices have been set based on the use of certain technologies.
So what is the value of a business's network? If $10 million of annual sales is 1) sold on Blackberries, VoIP handsets and email, 2) delivered using MS Project with parts procured on the internet and 3) accounted for on Dynamics GP (Great Plains) than "Beckstrom's Law" places the value of that network at the net earnings on that $10 million dollars. At a net margin of 7% - 10% that is $700k to $1 million dollars.
Why is this important? A $10 million dollar service company likely has no more than a $250,000 to $400,000 investment in technology. That's not a bad ROI.