Comments on "Grosch's law re-revisited: CPU power and the cost of computation"

Abstract

Taking Ein-Dor's recent reevaluation of Grosch's law one step further, the authors find evidence of different slopes for different classes of computers and the utility of an additional variable: the IBM or IBM-compatible factor. The analysis indicates that Grosch's law no longer applies to minicomputers. COMMENTS ON "GROSCH'S LAW RE REVISITED: CPU POWER AND THE COST OF COMPUTATION" YOUNG MOO KANG, ROBERT B. MILLER, and ROGER ALAN PICKAs hardware costs continue to decline and more attention is paid to the economics of software development and operation, hardware nonetheless remains a significant expense. In the face of decisions to be made about centralization versus decentralization of CPU resources, knowledge about economies of scale can help organizations narrow down the choice of alternatives to be seriously considered. For this reason, Ein-Dor's recent reevaluation of the applicability of Crosch's law [1] sparked our interest. Having looked into his analysis, we believe there is yet more information contained in the data Ein-Dor uses than his analysis reveals. Specifically, we find evidence of different slopes for different classes of computers, and the utility of an additional variable-the IBM or IBM-compatible factor. We hope the interest generated by the original article [2, 5] will maintain itself for this further analysis of the same data.

Recent applications of economic theory in information Technology research

“…[80]. Mendelson, in a more rigorous examination of the same data, found that a simple constant returns to scale model, with random noise, explained the data equally well, and was more consistent with the managerial trend in the increased use of smaller, decentralized hardware [107].…”

A Simultaneous Equation Model of Cost/Performance Relationships in Large Scale Computing

“…Some of these limitations derive from what the authors believe to be a fundamental methodological flaw. In particular, previous studies have regarded system performance as an exogenous variable and have assumed that the causal relationship between it and system cost is unidirectional [5], [10], [12], [22], [24]. Therefore, researchers have modelled the relationship between hardware characteristics and cost with a single equation and have estimated parameters with ordinary least squares.…”

“…In addition to the quantitative measures of hardware characteristics and their interactions, CPU performance and costs are influenced by the quality of characteristics or technology [12], [22]. There are economic incentives that encourage the creation and adoption of technology by vendors and users [33].…”

“…For many reasons, including the financial magnitude of the investment, the variety and size of the choice set, and the rapid changes in technology, there has been substantial interest in the modelling of cost/performance relationships e.g., [5], [10], [12], [17], [22], [24]. This interest derives from the needs of both users and vendors who seek, on the one hand, to make better comparisons and, on the other, to design hardware that has greater appeal to users [36].…”

“…Some performance testing has a purely computational, engi-: neering orientation designed to measure capacities and capabilities [2], (15], [25]. In other cases, however, cost has been expressed as a function of performance, and parameter estimates have been evaluated for economies of scale [5], [10], [12], [22]" [24].…”