Business needs, cost factors drive when to buy hardware

An oft-asked question in the information technology world is “When should I buy new hardware?” After all, the promise of cloud computing is that the heavy lifting is done by someone else. Has the game changed?

Just a few short years ago, the hardware vendor’s mantra was “every three years.” Accountant types would say five years, and many if not most folks went with “don’t fix it if it ain’t broke,” often stretching out the lives of their gear to seven years or more.

The “refresh cycle,” as it is commonly known, dictates that you should replace or upgrade your systems on a regular, periodic basis. Back in the day, the cycle ranged from anywhere between three and seven years. Nowadays we see many systems exceeding seven years in age and still functioning effectively. That’s a wide range, but a couple of major factors help decide which end of the scale to be on.

First, how important is the system to your business needs? Systems upon which you are highly dependent should have a shorter refresh cycle. After all, you need your core systems functioning at their most optimal level to reduce unplanned downtime and increase the productivity of your operations. Replace these before they break or run at less than optimal speed.

Cloud computing has definitely affected this criterion. With many critical systems now done over the internet, less powerful systems still can achieve high efficiency. After all, on the user end, oftentimes all you really need is a browser.

Another factor to take into account when determining a refresh cycle is to gauge how hard it would be to replace a system in case of failure. Easily replaced systems can have a longer refresh cycle. For example, generic systems that use off-the-shelf software don’t need as much care as specialized systems. Again, cloud computing makes replacement of equipment quite simple.

The total cost of ownership also should be taken into account when determining the refresh cycle. Many vendors increase the cost of maintenance after the third year of ownership, in an attempt to convince folks to buy new gear. Furthermore, as processing power continues to increase, you can get a much more powerful machine for cheaper, especially if you take into account system consolidation and virtualization. As such, there are cases where the decrease in maintenance costs significantly offsets the purchase price of a new system. This particular factor is harder to estimate and typically applies only to larger systems.

Once you have determined your refresh cycles, develop your IT budget and include the replacement of these assets. Spread out your costs accordingly. For example, in a four-year cycle you would switch out 25 percent of your equipment every year; in a five-year cycle 20 percent would be replaced. If times gets tough, then you can adjust your budget accordingly.

Best to plan on a more aggressive refresh cycle. It is a much easier proposition to make your hardware last six years instead of four, as opposed to a scattershot approach where you might end up with hardware that’s 9 or 10 years old and really pushing the bounds of its useful life.

John Agsalud is an IT expert with more than 25 years of information technology experience in Hawaii and around the world. He can be reached at jagsalud@live.com.