3 YEAR BUDGETTING
Nothing last forever. We replace clothes, cars, houses. Just about everything we buy and use needs to be replaced eventually. Technology equipment has to be replaced too, but the problem with technolgy is that it get's outdated quickly and is often a critical tool for your business.
3 YEAR LIFE EXPECTANCY
Most computer, network and technolgy equipment has a 3 year life expectancy. You can squeeze 4, 5 or more years of use from a computer or server, but in general you should expect to get 3 - 4 years of use from your equipment.
FACTORS THAT FORCE REPLACEMENT
There are 3 factors that force the need to upgrade and/or replace computer equipment.
Software requirements - Software drives hardware sales. New versions of application software that you use to run your business often require a more powerful computer or server to run on. If you upgrade your application software on your old equipment you may find that it runs slower. If you upgrade Windows you may find that it runs much slower on your old computer. WindowsXP will not run as quickly on a comuter that is runing Windows2000 for instance.
Hardware reliability - Computer equipment isn't designed to physically last 10 years. After 3 or more years hardware components may start to fail.
Cost - Computer and servers are getting less expensive each year. And they are certainly getting more powerful. The cost of supporting old hardware is rising, so it often makes more sense to replace it. The cost in productivity for yourself and your employees also forces you to evaluate replacing software and hardware. Why waste an hour a day, or a few hours each week doing something on a slow computer when it can be done in a fraction of the time and more easily with newer software or hardware?
3 YEAR WARRANTIES AND LEASES
Almost all business class computer/network equipment will come with a 3 year warranty. After that you can often extend the warrenty a 4th year, sometime longer, but the cost of keepign a manufacturers service contract on old equipment can be cost prohibitive. And the risks of not having a manufacturer's service contract/warrenty can be high. Because of the nature of obsolense in technolgy equipment, most leases are for 3 or fewer years.
DON'T GET CAUGHT
You don't want to get caught with having to buy all new computer equipment at the same time. Wise businesses use the 3 year rule:
3 YEAR RULE
In order to avoid the costly expense of having to replace all your equipment at the same time, a wise business owner should budget to replace 1/3 of the computer equipment each year. This means if you have 30 computers, you should budget to replace 10 computers each year to avoid having to replace 30 computers all at the same time. If you have 3 computers, you should budget 1 computer a year.
A computer can certainly last longer than 3 years. But what most business find is that a PC that was once considered fast enough for one person may not be fast enough for that person after a few years. But that older PC may be fine for someone else in the company who has lower requirements for a PC. Many business find that passing-down older computers from the heavy computer users to the lighter computer users is a way to get additional life from an older PC.
We can help you get as much out of your computer equipment as possible. We can also help you when it is time to upgrade or replace your software or hardware. And of course, we can help you understand the best way to achieve a good balance.