Computer Hardware Terms You Should Know

Author: Ben Cramer

In 2005 Brian Reale and inventor-partner Alex Tejada discovered a way to shine light on the contours of a dancer's moving body without casting shadows on the stage. Called Spotlesslight, the system used a computer and an infrared camera to track a dancer's ultra-precise movements; the effect would add a dazzling new dimension to how lighting crews could present a performance.

Cool idea--if only the computer could keep pace. "We just couldn't make this product three years ago," says Reale.

But three years is a lifetime in tech land. First, the price of several Spotless components caved. Next, the USB connectivity standard displaced FireWire, giving Spotless more options and therefore a cheaper way to connect the camera to the computer. Then tiny new compact flash cards (akin to the ubiquitous SD cards) suddenly provided a storage fix far more compact and power-efficient than traditional SSD-based hard drives. Finally, credit the gaming industry for pushing the bounds of GPU performance per dollar of cost.

"We needed a processor that could be dedicated to speed," says Reale. "GPUs, which don't carry all the baggage of a CPU, essentially solved our problem." He hopes to make his first Spotlesslight sale this month.

While tech-preneurs like Reale must harness the power of the latest computer hardware to compete, most small enterprises with a small office-based staff and traditional applications don't have to--and many tend to over-buy. That's because hardware is a classic blind spot for entrepreneurs more comfortable in front of customers than in front of motherboards.

Like it or not, running a competitive small business involves having at least a decent grasp on technology. That's why, with help from the smart folks at technology publisher O'Reilly Media, we've assembled a glossary of computer hardware tech terms that every entrepreneur should know. And you don't have to be Hewlett Packard's chief design engineer to fathom the implications these issues have on strategy and budgeting.

The key is choosing the right computing environment for the specific work you need to tackle. A legal services company doesn't need the speediest processors that money can buy, for example. "I think a lot of young businesses do a minimal checklist of what they think they need in the way of computing," says Philip Warton, president of California-based Spectio Consulting, who has worked 14 years as an IT professional. "And what they think they need is what everyone else has: a bunch of computers and wires."

Another reason to not over-buy: obsolescence. Thanks to Moore's Law, computing speed has been doubling--and component prices halving--roughly every 18 months for years now. Not long ago, playing video files required a free-standing video card; now we have integrated video via a tiny chip baked into a computer's motherboard. You'd think twice about splurging on a new car if you knew there would be one twice as good for the same price in two years. Yet plenty of small companies spend tons of cash on fancy new iron.

So what do you need? Most small businesses probably need a 1U, 2U or 4U server to handle e-mail, calendars and other processes you probably associate with Microsoft Outlook. But there's a way to shrink this significant investment.

Today you can opt for a "co-location" (or "colo") set-up, in which you rent the crunching power of a server sitting elsewhere. Colo contracts cost a fraction of owning an exchange server--about $10 per user per month, versus a $4,000 investment in a quickly depreciating machine. But the real advantage of using a colo setup is that the accompanying service agreement moves all maintenance issues--security patches, virus protection, spam filtering and the like--blissfully off-site. And that means better, more systematic and cheaper IT service instead of expensive, crisis-intervention IT visits to your office.

"Every small business Exchange server I have seen has failed catastrophically at some point because it wasn't being maintained," says Matt Siegel, IT professional and owner of New York's Little Tree Networks.

Of course, you'll still need to create a dependable, secure computing network--the hubs and switches that rout the electrons from the colo server to your workstations. There are three primary options for lashing together PCs and servers: Ethernet, wireless (or "wi-fi") and fiber optic cabling (or "FIoS").

Setting up a wi-fi network--simply plugging in a wireless router that uses 802.11b or 802.11g protocol (a communication tech standard) and ensuring users' machines are wi-fi-enabled--is the quickest and cheapest way to get an office up and running. Two downsides: speed and security. Most IT pros strongly discourage trying to get by with wireless networks. "All wi-fi encryption is currently broken," says Siegel. "The standard used to be WEP, which can now be cracked in 15 minutes or less. And the new standard is WPA, but a team of Russians just cracked that as well."

Unless you're on an extremely tight budget or have an unusual faith in cyber-crooks' ineptitude, go with a wired network that will set you back between zero dollars (if the cabling is in place when you move in) and about $100 per user if cable needs to be installed.

Within a cabled environment, though, there are choices to make. Most pre-wired office spaces will likely have Cat-5 (or "megabit ethernet") cable stock. This will provide more speed than most small businesses will ever need. Those seeking even faster connections, or who need to wire a space from scratch, should opt for gigabit ethernetwhich can be up to 10 times faster than megabit ethernet and will cost about the same to install.

Fiber optics promises speeds of five to 50 times that of megabit ethernet. But its cost--about $2 per foot of cable for starters--and the fact that only the likes of Pixar could possibly benefit from that kind of speed, make it a poor choice for most small-business local networks.

As for workstations, "I see start-ups spending two or three times what they need to on hardware and software," says Siegel. "I'd love to see small companies buying off-lease or refurbished PCs."

Two cost-saving options may work better than a fleet of shiny new Dell (nasdaq: DELL - news - people ) laptops. First, if you don't need today's fastest CPUs with Dual Core or Multi Core processors, you can shop eBay or Craigslist for very good used PCs at one-third to one-half the cost of new machines--your staff will likely never know the difference.

Better yet, says Warton, buying old machines with the Windows XP operating system offers you one of the only ways around Microsoft's (nasdaq: MSFT - news - people ) new and very unpopular Vista O.S., included with new machines. (Note: Whatever you do, make sure all the computers are running on the same system--try not jumble PCs and Apple (nasdaq: AAPL - news - people ) Macs together.)

Another workstation strategy: netbooks. These desktop terminals are little more than a shell of a computer--with monitor, keyboard and mouse. In this paradigm, these tiny workstations draw their processing power and access to all applications from a server; they might include a tiny CPU such as Intel's (nasdaq: INTC - news - people )Atom, found more in mobile devices than office computing. Netbooks can cost as little as $200 each--which means if something goes wrong with one, you don't bother calling your IT specialist, you just plunk down for a new one. And no data is stored locally so if you lose one, it doesn't represent a security breach.

Beware, however: Netbooks suffer from relatively sluggish connectivity to the Internet--though, again, that may not be a problem for many small businesses.

In fact, it might even boost productivity if YouTube and ESPN.com beat the patience of most employees.