The idea of a refresh cycle—a planned, knowable, consistent schedule of hardware updates —is one of the foundations of IT budgeting. For thousands of organizations, a key piece of deciding what the cycle will look like is residual value: how much the hardware will be worth at the end of the lease period. The problem is, in many cases, the hardware’s value to the enterprise is far more complex than the sum of its lease terms. Much of the complication in assigning value comes packaged with the IT department’s new mandate to add value to the organization rather than simply fulfilling orders from the business units for computing power. That means the following:
- Staying abreast of developing trends in computing
- Anticipating user demand for features and functionality
- Putting together systems that can take advantage of new services and applications in today’s rapidly developing world
The world has changed
The financial world has changed in the years since the four- and five-year purchase cycle came into effect, spurred by the equipment lease market. If you Google “workstation lease,” most of the entries you see will be for purchases of off-lease or refurbished hardware. In all but the largest companies, discussions about opex versus capex have shifted to other fronts. The big reasons for sticking with a long equipment cycle are historical, and even those are quickly becoming more hindrance than help for IT executives.
Two criteria for refreshing
Two things you should look at are total cost of ownership and total business value. There are a couple of points at which those two touch. In the days of the five-year hardware refresh, major operating system revisions happened no more than once every five to ten years. Today, significant updates can happen every three to five years. Furthermore, software publishers that have embraced an agile development methodology can push updates to customers on a weekly or monthly basis, with any given update taking advantage of new hardware features.
Supporting agile teams
The notion of business agility brings us to the second point, the one where IT adds value to the business. A growing number of companies are deciding that “agile” is how the entire organization—not just the software development group—should operate. While agile discipline doesn’t require any specific technology, it does presume that team members will be able to communicate with one another and share information and work products in immediate ways. As those sharing and communication technologies evolve, having the flexibility to update and replace workstations is critical. Software evolution involving technologies such as cloud computing have made certain specifications, such as storage capacity, less critical than we thought they would be five years ago. At the same time, other specifications, such as network speed and graphics capabilities, have grown in importance. Keep flexibility in your workstation fleet and agility in your organization by breaking out of refresh cycle tyranny. It’s the most valuable thing to do for your company.