Life Cycle for Desktops, Laptops and Servers

I manage the IT Department for a community bank (Inherited the position and learning as fast as I can).  One item that has always been drilled at me by auditors, etc is we should have a replacement cycle for our equipment.   Mainly speaking our desktops, laptops and servers.
We started doing 1/3 a year for desktops so we were on a moving cycle.   The Board stopped this and wants reasons why we should continue the cycle.    1/3 a year equates to about 16 desktops among 3 branches.   Besides the obvious that if they all start failing around the same time or cant handle software upgrades, etc.....The expense in one year will be significant.

Then our domain controller.    We have it set to cycle in 5 years and they don't want to do that either or upgrade our backup server.   2 very critical pieces of equipment.   Not wanting to use their approach and wait until it fails.

And then laptops....We keep 2 for use by officers for meetings and one for IT department when I travel to branches.    They are 5 years old and very slow.

Besides these obvious items, I could appreciate input as to the industry standard for equipment replacement and more solid reasons why we should that might satisfy a non-techie board memeber.
Who is Participating?
I wear a lot of hats...

"The solutions and answers provided on Experts Exchange have been extremely helpful to me over the last few years. I wear a lot of hats - Developer, Database Administrator, Help Desk, etc., so I know a lot of things but not a lot about one thing. Experts Exchange gives me answers from people who do know a lot about one thing, in a easy to use platform." -Todd S.

Steven CarnahanNetwork ManagerCommented:
Lee W, MVPTechnology and Business Process AdvisorCommented:
Servers are critical and run the business.  Your servers should be covered by a warranty as long as that warranty is economical (typically 3 years; longer warranties are possible, but usually cost so much that a new server makes more sense).

Desktops shouldn't be a problem.  Buy Dell Optiplex desktops and they come with a 3 year warranty.  I would replace desktops every 4-5 years.  Keep a spare or two at each location, but systems just shouldn't fail that often.

Laptops are subject to damage and so an accidental damage warranty makes sense and generally, doesn't cost much.  Would keep them 4-5 years with 1 for a spare.

Systems that are slow are probably slow because they lack RAM.  At worst, a reinstall and some RAM should have 5 year old laptops running pretty well.  I used my old laptop until about a year and half ago and it was 7, I believe, before I stopped using it.  Running XP Pro.
We do a 1/3 exchange each year with a 5 year cycle for servers as well.   The primary motivation for doing this is so that we have consistent cost per year as well as maintaining all of our machines under the manufacturers warranty.  

If you begin replacing computers on an as needed basis, you will not be able to effectively budget (as there is no way to predict with certainty when a machine will fail) nor plan your workload.  

Also, maintaining computers that are outside of warranty will raise your Total Cost of Ownership as you will be responsible for the cost of all parts and labor to return the machine to service.  

Likewise when looking at TCO, you also have to consider the cost of having older, slower machines and downtime from failures.

In terms of server, again the older the equipment - the greater the likelihood of failure.

The questions comes down to how much money are they willing to spend on downtime?  

Your Guide to Achieving IT Business Success

The IT Service Excellence Tool Kit has best practices to keep your clients happy and business booming. Inside, you’ll find everything you need to increase client satisfaction and retention, become more competitive, and increase your overall success.

Neil RussellTechnical Development LeadCommented:
Its simple. Talk to the accountants.

Your IT Equipment will be on the company Asset register. Almost all kit will be on a 3yr depreciation program. i.e. it will have no monetry value to the company after 3 years.
If it has no value then bin it and use your cash to invest in assets that are worth money.

Steven CarnahanNetwork ManagerCommented:
@leew:  Very good description.  

We have a policy in place that states minimum instead of maximum life cycle:

Desktops & laptops = 3 years
We always get a 3 year maintenance on desktops and laptops. If the machine has not demonstrated any major issues we address the option of 1-2 year renewal.

Servers = 5 years
We maintain maintenance for the enitre time we have it.

There are some special items that we keep for longer such as a blade server.

All of this is subjective to the performance of the machine in question. Good problem logging is a must.

The link I posted earlier doesn't give any actual guidelines in years but does have some interesting information in it.
Here is why you want to replace all IT assets every 3 years,
1. Most OEM's only provide you a 3 year warranty
2. Running equipment out of warranty is ok for cheapo computers and printers but not for servers
3. Keeping servers in warranty costs you in year 4, money thatt could be spent on new hardware
4. Out of warranty parts are not provided same day or even next business day depending on the OEM. Keeping all necessary spare parts on hand costs you even more.
5. Software development normally only supports hardware less than 3 years old
6. The cost to maintain equipment beyond year 3 in hardware and IT resources increases dramatically

Finally, ask the financial guys if they would drive their own cars without ever replacing the tires. You know that sick feeling you get when a tire blows out at 70 MPH. Thats how you will feel when your core systems blow out in year 4.

Experts Exchange Solution brought to you by

Your issues matter to us.

Facing a tech roadblock? Get the help and guidance you need from experienced professionals who care. Ask your question anytime, anywhere, with no hassle.

Start your 7-day free trial
Lee W, MVPTechnology and Business Process AdvisorCommented:
I really have to disagree with the idea that workstations should be replaced every 3 years or that they have significantly increased failure.  Increased failure, yes, SIGNIFICANTLY increased failure, no, I don't think so.  Most of my clients use workstations that are probably 3-5 years old with no ill effects.  Today's equipment is very reliable.  MOVING PARTS can be an issue, such as fans and hard drives.  But that's why you keep a spare system or two in each location.  Or even a spare hard drive or two.  Dropping an image on a box and updating it shouldn't take more than a couple of hours... this should be a LOT cheaper than the cost involved in purchasing and deploying a new PC.  Again, you can't keep things for a decade, but 4-5 years should not be a problem.
3 years, 4 years, or 5 years....   You need to be on a dependable cycle for planning and budgeting.   To do otherwise is irresponsible and just does not make good business sense.  

In terms of equipment life, I have computers running that are almost 7 years old, but in a a secondary role - not a primary business function.   So, yes, most enterprise class machines will be fine over 4-5 years, but you have to know that there will be an increase in the cost of ownership of these machines once the warranty is out.  

A comment about staffing....  If your bank is small like my organization, you make good use of your warranty including on-site service.  There can be a significant savings involved (i.e. less $ for salaries) with the appropriate use your warranty.  

Steven CarnahanNetwork ManagerCommented:
I am the Network Manager of a State bank and we too feel the pressure from management about extending the like of our equipment. We have many workstations that are in the 5-7 year old time frame. We have recently started replacing them with WYSE terminals as all our applications are run through terminal services anyway. We were able to justify this method by showing additional cost savings in less power consumption, more security and less "real estate" consumed.

There are other reasons besides possible failure rate to replace servers on a regular basis. If the organization shows the potential for good growth then the hardware of a server may not be able to support it. When you have to replace/upgrade/adding processors, RAM and disk drives you could end up spending as much as simply replacing the server.

You should be maintaining a disaster recovery site as well. What we do is move the older (off warranty) servers to the dr site since it isn't as critical and will be used on a lower scale while the main site is down. This extends the life cycle of the equipment by nearly double while maintaining a current set of servers in the primary site.

I would also like to add that you should do some research on the cost of data loss. These costs are...extreme when it comes to critical data and the cost of data recovery. If you start playing around with the MTBR (Mean Time Between Replacement), you are looking at an increased risk of data loss if hardware fails. With the typical server development cycle being 1.5 years, a 3 year old machine is 2 generations old.

Additionally, replacing an important server means you are migrating the data which means you are usually testing your backup/recovery strategy. This is always an important part of responsibly maintaining critical data.

A good CBA (Cost Benefit Analysis) taking into consideration cost of failure will usually show an accountant the benefit of routine hardware maintenance/renewal, especially when you include the budgeting factors mentioned by others.
bankwestCTO/CashierAuthor Commented:
I had to share among the answers as they were all very helpful in helping me address the issue with by  Board.
Lee W, MVPTechnology and Business Process AdvisorCommented:
So I guess my answer was useless?
bankwestCTO/CashierAuthor Commented:
I am so sorry.    Everyones answer was beneficial.   I thought I had checked all of them and now I see I missed some people who responded
I know the question is closed. You might want to try running an inventory management software, if you don't already have one, i use Spcieworks from, it has an addone that shows you the depreciation rate for the systems you have.
It's more than this solution.Get answers and train to solve all your tech problems - anytime, anywhere.Try it for free Edge Out The Competitionfor your dream job with proven skills and certifications.Get started today Stand Outas the employee with proven skills.Start learning today for free Move Your Career Forwardwith certification training in the latest technologies.Start your trial today
Server Hardware

From novice to tech pro — start learning today.