Should You Replace IT Hardware or Just Get Rid of It?

(UPDATED) April 2019: All IT hardware has an expiration date. So when your organization owns computers, servers, switches and any other tangible piece of IT equipment, the conventional wisdom has been to replace it as it reaches the end of its life — of course! But now that software has been eating the world, conventional wisdom may not be so wise. It’s time to rethink your asset management strategy or you may end up spending money on hardware you no longer need.

Here’s what you need to know about deciding to replace IT hardware in a software-dominant world:

Virtualization, cloud computing and capital cycles

The physical has given way to the virtual everywhere you look. Just as you don’t need to buy CDs, DVDs, film or paperback books anymore — they’ve all been virtualized — you probably don’t need to buy as much hardware to run your network anymore either. Functions that used to take place in hardware now take place in software.

Software makes it possible for virtualized networks to use fewer servers. Software-defined networking is making network switches obsolete. And cloud computing has turned practically every IT function into an “as a Service” option so you can use someone else’s hardware entirely. Why buy, manage and replace hardware if you don’t have to?

And while there may still be very good reasons to own some of your own hardware, are they the same reasons as five years ago?

Capital cycles for replacing computing hardware typically run every three to five years. When to replace hardware depends on two things — how heavily the hardware has been used and how much your operations would improve if you bought newer, better hardware. Recessions tend to stretch the cycle, sometimes nearly to the breaking point.

So while it’s been a best practice to have your asset database automatically inform you when it’s time to upgrade each component, asset management is more complicated than that now. You need to know what you’re using each component for, whether or not there’s a better option, and what your options might look like in the next three to five years.

These three types of hardware components are becoming obsolete the fastest:

  • PBX systems. Traditional PBX systems (phone systems) can be expensive to own. Companies have been using Voice Over Internet Protocol (VoIP) for years to successfully run their businesses, taking advantage of increased functionality while sometimes sacrificing voice call quality. For internet voice calls to consistently sound as good as landline calls they need a perfectly smooth internet connection. Improved internet provider services and Software-Defined WAN (SD-WAN) make it possible, and increasingly popular.
  • Windows desktops. If your company owns a slew of desktops, you’re probably replacing a third of them each year. But now could be the time to start looking at Virtual Desktop Infrastructure (VDI). With VDI, all of your business data is kept on a single high-performance platform in the cloud. Employee’s desktops also live in the cloud and not on each individual computer. So you don’t need computers at each workstation — dumb terminals work fine, and they’re a lot cheaper and easier to manage. Plus employees can access VDI using any device, including their own laptops.
  • Servers. Servers not only need to be purchased, they need to be maintained and managed. Could you get the same or better network performance by using someone else’s servers? And by having someone else manage them? Every day more companies are putting more computing power in the cloud — in the public cloud or in a private cloud owned by someone else. Moving some or all of your business to the cloud is a major undertaking but in the long run it can free up some capital and improve your business operations.

What’s the best way to determine which hardware to update and which to scrap?

    1. Talk about your options with your IT department and leadership team on a regular basis. Time marches on and technology speeds ahead. Your company needs to stay up-to-date on your options so you know what’s possible.
    2. Determine the best methodology. How will you decide which way to go when it’s time to replace hardware? While it’s important to be nimble, it’s also important to have a plan. The type of business you’re in, the phase of business you’re in, and whether your team is filled with early adopters or people who miss Windows XP all factor into your methodology as well.
    3. Review everything with your trusted IT advisor. Bring in people who know more about IT than you do and who don’t have skin in the game when it comes to selling you new equipment. Do your forecasting together. And include the person in charge of purchasing.
    4. Plan refresh cycles so they work best with your budget. It might make sense for you to continue with your current hardware upgrade methodology for one or two more cycles before making a change. Budgeting for something different can take a while to work out, especially if you’re moving things from capital expenses to operating expenses. Accounting will also need to depreciate the hardware investments at the end of their usable life, which is based on the time of purchase.

One of the things our clients say they like best about Leapfrog Services is they know what’s coming down the pipeline. We’re in constant communication with our clients about their strategic IT roadmap, which includes when to plan to replace IT hardware, if at all. Our advice about replacement is based on our experiences managing hundreds of client networks — we’re constantly testing, deploying, evaluating, and verifying hardware and software tools. Please feel free to contact us if you want to discuss your options for replacing IT hardware.

If your goal is an optimized IT environment that helps your company grow and prosper, you need highly effective Help Desk support. The faster problems get solved, the sooner your team can get back to work. Leapfrog offers a range of managed IT services, including 24/7/365 Help Desk Support.

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