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Examining the PC upgrade cycle

Jan 13, 20034 mins

Gartner recently reported that many companies are extending the life spans of their PCs by not refreshing them as often as before. It was fairly common to see a three-year refresh cycle, so that every year, one-third of a company’s PCs were retired as new PCs came in the door. Now, according to Gartner, improved technology and shrinking IT budgets have induced many companies to replace PCs every four years.

I’m in favor of the more-frequent refresh rate. It costs a lot of money to replace a third of your PCs every year, but the cost of not replacing them is even higher. Plus, there are good technology reasons for wanting the latest and greatest PCs on the market today.

The cost to support a PC each year is anywhere from three to five times higher than the cost to purchase the PC in the first place. Depending on where you get your numbers – Gartner, Forrester, Fortune, The Economist or elsewhere – the research indicates that average annual support costs can range from $5,000 to $10,000 per PC.

What’s more, as the PC ages, the annual costs go up because more maintenance is needed. Gartner reports that a typical support call can cost between $35 and $50. A longer call can cost hundreds of dollars. It’s not the newer PCs that typically need chronic care; it’s the older PCs that probably don’t even have a book value of $100. With warranties on older PCs expiring, repairs are more expensive. In addition, user self-help is easier when the technology is newer.

Older PCs are likely to have missed some critical maintenance activities through the years, such as defragmenting the disk, uninstalling files that are no longer needed and applying software patches. Each missed maintenance opportunity is a help desk call waiting to happen.

Because most support problems are related to software, you might be tempted to upgrade just the operating system and leave the old hardware in place. I say, replace them both. These days, the purchase price of a new desktop (monitor not included) can be as low as $800, and that’s not a stripped-down model. Most likely it will come preconfigured with Windows XP and very good application software.

Replacing the hardware assures that you can run the latest software. Even though Microsoft set the hardware bar relatively low for running XP, you really wouldn’t want to put XP on an older PC. That’s akin to putting a fresh coat of paint on a beat-up, old car. The surface might look great, but the engine is getting tired.

The new Intel chips going into PCs today are 10 times faster than those that went into PCs just a few years ago. Users tend to blame the operating system, the software or the Internet connection when the PC seems sluggish. Could it be that the CPU of the 4-year-old PC just can’t keep up with today’s processing demands? Some common CPU-intensive activities that could use the boost of a new processor chip are editing images or video clips, background virus-scanning, number-crunching in databases and spreadsheets, and even gaming and ripping CDs and DVDs. Intel’s new hyperthreading technology boosts those kinds of activities like there’s no tomorrow.

Maintaining a short list of corporate standards is another good reason to keep PC life cycles to three years or less. With older PCs in your company’s mix, you’ll have to support multiple operating systems and hardware platforms. You’ll need to keep an inventory of parts for numerous PC models, and maybe even multiple manufacturers. Your staff needs to know how to support the old and the new. In short, the broader the array of models and products you support, the higher the support costs.

Of course, I’m preaching to the choir on this issue. You know my assertions are true. It’s your CFO who needs to see that old dogs in the PC arsenal cost the company more money. Maybe my arguments will help support your case. If not, just show the CFO the numbers of what it takes to support the old vs. the new devices in your midst. It won’t take creative accounting to prove this case.