What are the direct and opportunity costs to having a workstation out of service?

Using computer equipment and networking infrastructure older than 5 years in a networked business setting can come with risks and expenses that outweigh the initial savings. Deferring regular a tech refresh and delaying updating of critical software systems leads to a technological debt load for an organization, with unanticipated urgent costs in the future when systems fail to meet the needs of present day requirements, security or company growth.

Risks of Tech Debt Include:

Security vulnerabilities

As technology advances, new security threats emerge. Older equipment may not have the necessary security features (TPM, secure firmware, up to date OS for example) to protect against these threats, making them more vulnerable to cyber attacks. Manufacturers may also discontinue releasing software and firmware updates, leaving these models exposed to known flaws.

Reduced performance

As technology advances, software and operating systems require more resources to function. Older equipment may not have the necessary hardware capabilities to run the latest software, leading to slow performance and decreased productivity.

One example is drive speed; new computer equipment comes with fast solid-state “hard” drives as standard. Older machines with rotating hard drives are painfully slow to boot or load software in comparison. Hard drives are a point of failure, all mechanical drives have a limited lifespan, and will fail over time, with the resulting impact of loss of data and downtime.

New equipment can also fail unexpectedly but the risk of failure can be mapped on a bell curve, with early life products being a very low percentage, and new equipment is usually covered by manufacturers’ warranty for 1 to 3 years.

Reduced performance due to lack of a tech refresh program

Lack of support

Manufacturers and vendors typically stop providing software updates and technical support for older equipment and software after a certain period, making it difficult to troubleshoot and fix issues that may arise. 

Compliance issues

Many industries have regulations that require businesses to use equipment that meets certain security standards. Using older equipment may put a business at risk of non-compliance, which can lead to penalties or loss of certifications. 

Data loss

As equipment ages, the risk of hardware failure increases. This can result in data loss, which can be devastating for a business. Whether you have new or older infrastructure, It is important to have a backup regimen and a robust disaster recovery plan in place to mitigate this risk. 

Losing technology due to lack of a tech refresh program

Expenses With Older Computing Infrastructure Include:

Replacement costs

As equipment ages, it becomes more likely to fail. Replacing older equipment can be expensive and may require additional expenses, such as data migration and software re-configuration.  By planning a scheduled replacement programme, these costs become more predictable and can be budgeted for.

Maintenance costs

Older equipment may require more frequent repairs and maintenance, which can add up over time. Parts for aged machinery may not be easily available. On the other hand, new equipment usually comes with one to three year warranties, with options for warranty extension, which ensures limited costs for maintenance. 

Energy costs

Older equipment may be less energy efficient, leading to higher energy bills. Modern processors in particular have been designed for much more computing speed with half or less of the electrical consumption and heat production of earlier generation CPUs. Newer equipment often complies with EnergyStar or PowerSmart ratings

Money loss due to lack of tech refresh

Training and staff productivity costs

As equipment ages, it may become harder for employees to use. This may require additional training for employees, which can be costly, or slow down their daily work. Out of date software systems, or line of business software that is not integrated well, can cause productivity losses as staff struggle with making them work. 

Licensing costs

Newer software and operating systems may not be compatible with older equipment, and new versions of productivity software may require higher minimum system and equipment standards. This may require businesses to purchase new licenses for software that is compatible with older equipment, which can be expensive.  

In some cases, old software platforms can reach EOS (End of Support) dates, or the developer may be acquired or go out of production, leaving orphaned programs that may be business critical. 

IT support costs

As equipment ages, it may require more frequent support from IT staff. This can add up over time and may require additional staff to be hired. 

Read more about how to reduce IT costs here

Is It Ever Cost Effective to Save Money With Refurbished or Used Hardware?

Older equipment will have a shorter remaining lifespan than newer equipment, which can mean that replacement costs may be more frequent. Additionally, older computers may not be able to handle the demands of new software and operating systems, which can lead to decreased productivity.  

One use case for purchasing refurbished equipment is where a project has a defined end date, the requirements are well known and stable, and the equipment is planned to be disposed of in a short time (1 -2 years, maximum). Even at this, the maintenance cost must be evaluated, and research done to ensure that all the security and software requirement standards can be met for the limited duration of the project. 

What Other Costs are at Risk? 

Consider the cost of downtime when equipment fails, which can be significant. What the direct and opportunity costs to having a workstation out of service, or a network component taking tens of users out of work at one time? 

Whether the computing infrastructure is new or aged, it is recommended to have a plan in place to minimize downtime and ensure that the business can continue to operate while equipment is being repaired or replaced. 

In Summary

While continuing to use older equipment (or purchasing reconditioned equipment) may seem like a cost-effective option, it can come with a number of risks and expenses that can ultimately outweigh the initial savings. It’s important to weigh the costs and risks of using older equipment against the potential benefits, and to have a replacement plan and budget in place to manage these risks and expenses, as well as a process of regularly evaluating the equipment in use, to ensure that it meets the current and future needs of the business.