Businesses should replace, update hardware regularly

An oft-asked question in the information technology world is, When should I buy new hardware? My vendor is telling me every three years, my accountant is telling me every five years, and my checkbook says “don’t fix it if it ain’t broke.” What is the real answer?

Well, as usual in the IT world, the answer is, It depends. The “refresh cycle,” as it is commonly known, dictates that you should replace or upgrade your systems on a regular, periodic basis. Generally speaking, this can be anywhere between three and seven years. That’s kind of a wide range, but there are a couple of major factors that 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.

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. Of course, there are several steps you can take to make system replacement easier, but that is the topic of another column.

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 only applies 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.

For example, during the Great Recession many organizations put off new hardware for a couple of years. This is much easier to deal with if you are on a regular 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 johnagsalud@yahoo.com.