The question about how often to replace IT equipment is one that our clients often ask us. Many are concerned that they will have to replace their brand new server in a few years, and for that reason a tendency to buy lower end models and not the recommended models arises. So how do we respond to this question? There are 5 factors to consider: equipment quality, equipment warranty,   value of equipment, budgetary concerns; and finally how the equipment is being utilized.

Equipment Quality?

Determining the quality of the equipment you are purchasing is a key factor when thinking of replacing IT equipment. How is this so?  If you are purchasing a server based solely on a budget price, it will most likely be limited in capabilities and specifications. From experience, we have seen how some companies try to pass a workstation as a server in order to save money. This is unacceptable, however if your company is operating in this manner, the life cycle of your “server” will be short!  You have to consider that your server needs to have the capacity to “grow” with your company for at least 3 to 5 years, and it should be dependable so it doesn’t end up costing you more money to maintain it. The lesson here is plan accordingly to your needs, and buy a dependable, reliable, server with the right specifications, this way it can last you at least 3 years or more.

Equipment Warranty

Most manufacturers will offer a 1-3 year warranty on their servers depending on the model, and you can upgrade the warranty up to a 5th year on some models.  However, there is a tendency for the upgrade in warranty to be a bit pricier. Therefore, Xennix would recommend to only utilize the server for critical data and operations while it is under warranty for two reasons:

  1. 1. It is less likely to fail
  2. If you do encounter a problem with the hardware, it can be replaced at no additional cost!

As a side point it always makes sense to utilize redundancies such as RAID for your hard drives and redundant power supplies.

Equipment Value

It is important to communicate with your accounting department on the method used to depreciate your IT equipment. The depreciation for IT equipment is 3 to 5 years, depending on what accounting principle your company uses and the tax laws of your area, but usually by the 5th year your server has been fully depreciated and written off from the books. Therefore, it is important to communicate with the accounting department on this matter and for the most part when purchasing new equipment the accounting department is in charge of disbursing the funds so it’s always a good idea to be on the same page when it comes to equipment’s life cycles and a timeline for replacements.

Budgetary Concerns

Money is always a primary factor in considering when to replace IT equipment, and in these tough economic times, a lot of business owners are choosing to wait before replacing equipment.  The mentality of “if it ain’t broke don’t fix it” prevails.  To avoid limping along with outdated equipment, it is a good idea to discuss what your company’s policy to replace equipment will be.  Again, it all boils down to communication.  If you are an IT manager, speak with the accounts department and owner or decision maker, and let them know clearly the cost of NOT replacing equipment. A good rule of thumb will be to replace equipment before it starts to cost more money to maintain it and before it begins to affect the productivity of your employees. Time is money and so is lost productivity.  It is also a wise decision to determine the policy of replacing servers to avoid unexpected cost which typically tends to happen with the “if it ain’t broke don’t fix it” mentality.

As you can see, deciding when to replace your IT equipment really depends on your organization, its needs, and its accounting principles. However, as an IT manager or decision maker in your company you play a vital role in helping your company; decide what your policy for replacing servers should be.

Xennix recommends that all four factors mentioned be taken into consideration and, as IT Business consultants, we can assist you in the process of determining your company’s replacement policy. Xennix also recommends monitoring your servers as a way to prevent or detect problems before they bring your business down.  Visit www.xennix.com for more information on our network monitoring packages.