Ask what seems like a simple question: How often should PCs be replaced? – and you’ll find that for IT managers, the answer isn’t so simple. And it’s certainly not universal.
The correct answer at Grant Thornton LLP is 24 months. And next month, the Chicago-based accounting and management consulting firm plans to replace 5,000 laptop and desktop PCs that have reached the two-year usage limit.
At Southern Co., an electricity generator and utility operator in Atlanta that has about 23,000 PCs, the answer is three years for laptops. But 18 months ago, it began replacing desktop systems every four years.
And Virgin Entertainment Group Inc. has no single answer to the PC replacement question. Instead, the Los Angeles-based company has an “on demand” refresh policy under which it replaces systems as needed, based on the business requirements of individual workers or departments.
Some of its 700 PCs, in particular the desktops, may be four or even five years old.
For IT execs in general, financing arrangements, the ways PCs have been used, the need for more processing power to run resource-intensive applications, and “softer” issues – such as keeping younger employees happy by giving them new technology – can all be considerations in deciding when to replace systems.
But while there may not be any real consensus among companies, the broader IT trends point to an expanding period between PC refreshes.
Many companies have settled on a three-year refresh cycle for laptops and a four-year window for desktops, said Gartner Inc. analyst Leslie Fiering, who added that the replacement cycles have increased over the past few years. Four years isn’t even out of the question for laptops or notebook PCs, Fiering said.
Of all the factors that can influence a PC replacement schedule, accounting may be the most important.
And while the slowing economy may prompt some companies that treat their PCs as a capital expense to hold on to the systems longer, many businesses lease their equipment and are sticking with the refresh schedules in their contracts, as is the case at Grant Thornton.
Dave Johnson, the firm’s director of infrastructure and technology, said that he gets a higher residual value on systems by taking them under a shorter lease, thus helping to lower his overall costs. And, he said, the lease payments take the residual-value calculations into account, “so it doesn’t necessarily pay to go out much beyond 30 to 36 months.”
But financing issues aren’t all that’s in play. For instance, laptops are the point of the technology spear at Grant Thornton.
Its work involves a lot of travel to client sites, which can be tough on IT equipment. Johnson said the durability of laptops is increasing, but not enough for him to extend his 24-month refresh cycle.
Another reason why the two-year cycle still makes sense for Johnson is that he can be certain the hardware he gives his users will meet their application needs for that amount of time. “The further out you go, the better your crystal ball needs to be as to exactly what you are going to be running three to four years from now,” he said.
William Lewkowski, CIO at Metro Health Corp. in Wyoming, Mich., leases most of the health care provider’s technology, including PCs and data center equipment. Lewkowski likes how the leasing approach drives IT upgrades.
“It forces us to keep current every three or three and a half years,” he said.
But Lewkowski said he doesn’t doubt that he could extend the life spans of some of his desktop systems in particular to four or five years, especially as he starts using virtualization technology to deliver applications to end users.
On the other hand, Virgin Entertainment CIO Robert Fort buys his IT gear and treats the purchases as a capital expense, which gives him more flexibility than he would have if he was leasing equipment. Then it becomes a question of how best to spend the company’s IT dollars – on replacements of all PCs at regular intervals, or on what Fort described as “higher-priority activities”?
“This younger workforce, they really want the latest tools. They’re going to push us to be very progressive. It’s not like the workforce of the past.”
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Fort’s answer to that question is that replacing PCs on an as-needed basis makes the most sense. Each year, he sets a baseline configuration standard with his PC vendor that any new systems must meet.
But deciding when individual PCs should be replaced can depend on factors such as application needs and the amount of on-the-road use that they get, Fort said.
Rebecca Blalock, Southern Co.’s CIO, said she thinks desktop technology “has stabilized enough” to make a four-year refresh cycle on those systems feasible for users.
But there’s still a need to stick to three years on laptops, Blalock said, and she doesn’t see the life cycle for either laptops or desktops getting much longer.
With new processors still arriving at a Moore’s Law pace of every 18 months or so, the cost of computing power continues to decline rapidly, Blalock said. And software vendors continue to develop applications that are more functional and require more processing power, she pointed out.
There’s also the need to meet the expectations of employees, especially young, IT-savvy ones. “This younger workforce, they really want the latest tools,” Blalock said. “They’re going to push us to be very progressive. It’s not like the workforce of the past.”
Steve Rubinow, CIO at NYSE Euronext Inc., which operates the New York Stock Exchange, said he sometimes hears complaints about laptops even from workers who do nothing more than run Word.
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The NYSE uses a combination of blanket upgrades and replacements based on use. For instance, some developers may still be walking around with four-year-old laptops, while frequent travelers may get new machines much sooner.
“The rule of thumb is still three years,” Rubinow said. But, he added, “it’s as much driven by accounting mentality as it is by technology changes.”
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