Document Type

Article

Publication Date

1-1-2011

Publication Title

The Business Review, Cambridge

Volume

18

Issue Number

1

First Page

28

Last Page

34

Disciplines

Business | Management Information Systems

Abstract

As new computer hardware becomes available offering better performance at a lower price, computer accessibility rapidly improves resulting in dramatic changes to society. Planners in business and other organizations need an estimate of future prices and performance to help design their systems or to anticipate the effect of these changes. This paper presents a new set of historical annual data from 1987 to 2010 defining basic price to performance measurements for computer components including processors, hard drives, random access memory, and network interface cards. Two approaches to extrapolating price to performance are evaluated, the industry learning curve and a constant rate of increase implied by Moore’s Law. Regression analysis of this new dataset shows long-term, stable improvements in price to performance consistent with Moore’s Law provide a very good fit of historical data and a better approach to extrapolating future price to performance than a learning curve approach. Practioners can apply basic percentage changes to make reasonable forecasts that may be modified by short-term market fluctuations

Comments

"Copyright © 2011 American Academy of Business. Citation: Webb, G. K. (2011). Extrapolating the Price to Performance Frontier for Computer System Components: Processing, Storage, Memory, and Network Interface. Journal of American Business Review, Cambridge, 18 (1), 28-34." Copyright permission expires 09/2016.

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