Built to Last

Financial pressures combined with increased reliability have companies keeping systems longer than ever.

Computer systems aren't what they used to be—and IT is taking full advantage of that fact. As the durability and reliability of servers, desktop PCs and laptops have improved, organizations are keeping equipment longer. The average time between refreshes for servers is now four to six years, up from just two to three years in the 1990s, according to Boston-based Yankee Group Research Inc. In addition, tighter budgets have forced IT to consider extending those life cycles.

In some cases, organizations are keeping servers and desktops even longer. "Some of our machines are eight or nine years old," says Michael Dunham, information systems manager at Fun Sun Vacations Ltd. in Edmonton, Alberta. He says that until recently, his company, which has about 60 servers, simply migrated older units to less critical tasks and ran them until they died. Now, he says, Fun Sun has settled on a five-year replacement schedule for all of its machines.

IT's life-cycle demands have raised the bar for vendors. "There's more pressure on us to make the boxes last a longer period of time," acknowledges Bill Owens, vice president of service and support at Lenovo Group Ltd. in Purchase, N.Y.

Cash-flow concerns are motivating companies to keep equipment longer, says David Phieler, vice president of IT outsourcing at Electronic Data Systems Corp. in Plano Texas. Budgets are "tighter than they were 10 years ago," he says. Systems are also better engineered to accommodate failures. Hot-swappable components, predictive failure analysis for subsystems such as disk drives, and redundancy in everything from proc?essors to power supplies are making failures less painful.

The move toward extended equipment life spans gained a foothold after the dot-com crash, says Jeff Wood, director of alliances at Dallas-based CompuCom Systems Inc., which maintains IT equipment for corporate clients. "The economy... forced a lot of companies to hold on to their equipment a little bit longer," he says. But even as the business climate has improved, organizations have come to expect longer life cycles from their equipment. Now, he says, "they hold on to servers for four to six years in many cases."

John Enck, an analyst at Gartner Inc. in Stamford, Conn., also has observed that its clients are keeping servers longer. "I've seen somewhat of a trend to stretching usage more into the four-to-five-year range instead of the three-to-four-year range," he says.

New Software, Old Hardware

The life cycle of PCs is now three to four and a half years, says Yankee Group analyst Laura DiDio. Operating system upgrades also must wait until hardware is refreshed—though many organizations are installing new operating systems on existing equipment rather than buying new hardware for the new software.

According to a June survey by UBS Investment Research, when Microsoft Corp.'s Vista debuts, companies will be more likely to install it on existing hardware than they would have been with previous operating systems. Indeed, 40% of the 60 respondents indicated that they would upgrade existing PCs rather than replace them.

From a durability perspective, computers can go even longer than current refresh cycles, says Howard Locker, chief architect for mobile and desktop development at Lenovo. "A desktop can last seven years easy," he says. Laptops are less durable because of the abuse they undergo. Despite sturdier case designs and innovations such as hard disk drives that park read heads as soon as motion is detected, most laptops won't last more than three years without breaking, Locker says.

"Most of our failures are related to the hard drive," says Jim O'Grady, director of high-performance file system technology value solutions at Hewlett-Packard Co.

Failure rates can be as high as 20% for notebooks in the first year, claims Gartner analyst Leslie Fiering. "The annualized [failure] rate is about 15% for desktops by Years 3 and 4 but is about 28% for notebooks in Year 3 and can be as much as 35% in Year 4."

Those statistics don't stop businesses from trying to squeeze the maximum life from their laptops, however. "We hang on to them until they die, typically," says Mark Flieger, vice president of information services at Occupational Health & Rehabilitation Inc. in Hingham, Mass. But, he acknowledges, "when you start getting beyond four to five years, they start dropping like flies."

"We start to see problems develop in the fourth year," says Michael Kahn, vice president of technology planning at The Bank of New York Co. While hard drives and power supplies are the most likely desktop PC components to fail, with laptops, the screens tend to crack. "That seems to be our biggest problem," he says.

Paul Melnyk, director of the business technology group at Alias Systems Inc. in Toronto, says a four-to-five-year cycle for laptops is about right. "We have units that are 5 years old and going strong," he says. To make them last, he rotates in newer units and puts the older ones in a loaner pool for employees who have desktops and need systems for occasional travel.

Keyboards, power supplies and CPU cooling fans are other common failure points, especially on desktops, users and vendors say. "With our servers, it's just mostly power supplies and fans," says Dunham.

Newer LCD displays last longer, both on laptops and as a replacement for CRTs on the desktop. "The early laptops with [thin-film transistors] would get dropped pixels. Over the last few years, that has gone away" says Flieger.

Longevity has also improved. "We have LCDs that are 4 years old, and the quality is still much better than a CRT," says Mike Sink, director of infrastructure at Kichler Lighting in Cleveland. Today's LCDs should last six to seven years, according to Lenovo.

Organizations that want to keep systems longer will be more successful if they plan ahead. Yankee Group's DiDio says organizations should buy servers from top-tier manufacturers, select high-end configurations to delay obsolescence and follow best practices such as keeping equipment in climate-controlled rooms.

"We buy a higher-end box. We buy the higher-end versions so you get more bang for the buck," says Fun Sun's Dunham. That strategy also has another benefit: Older servers' functions can be consolidated on the new machines. For example, Dunham replaced five aging servers that performed Domain Name System and system monitoring functions with one dual-processor Xeon server. "It would outperform all five stacked up against it," he says.

After installation, maintenance is critical to system longevity. Heat and dust are the biggest killers of computers, says HP's O'Grady. "Unless you do preventive maintenance, the dust gets inside a PC and causes it to fail over time," he says. Maintenance is especially important where environmental conditions like heat, humidity and dust can't be controlled. "In warehousing and operation environments, the dirt and grime is really bringing these systems down. It just chokes the internals, the heat builds up, and it causes failures," O'Grady says.

Dunham advocates a monthly cleaning of servers, including the fans. "That's one of the biggest things people neglect, even in clean environments," he says. Backup servers take the load while technicians perform the system maintenance.

DiDio says older servers can also serve as "cold" backups for front-line servers during downtime. In the case of Windows servers, she says, new volume-licensing agreements allow the use of cold backup servers for redundancy without incurring extra costs.

There is a downside to keeping equipment longer. Most companies rotate a percentage of systems every year, so a five-year rotation might mean more models to manage, says Locker. "If I replace [computers] every three years, at any point in time, I have three models I am supporting," he says. "If I replace every five years, I have five models."

As computers get older, parts may be harder to find. "No vendor commits to providing replacement parts beyond five years," says Gartner's Enck. Over time, the price for those older, slower spare parts can actually increase.

Meanwhile, the cost of new equipment continues to drop. "In 2005, companies can purchase a midrange server configuration equipped with two to four processors that provides 40% to 50% more processing power, better reliability and scalability, for 50% to 60% less than what companies paid for a single processor machine that they purchased in 1999," says DiDio.

But Dunham says it's not maintenance issues but changing software requirements that ultimately force most companies to upgrade equipment. Therefore, managing software upgrade cycles is key. As for computer hardware failures, "we haven't seen too many die," Dunham says.

At Bank of New York, Kahn says security software requirements have actually cut its computer life cycles from five to six years to four. "Right now, we're in a four-year life cycle on the vast majority of our equipment," he says, which is still longer than the average for most companies just a few years ago. Kahn says he'd prefer to keep the equipment even longer. "We have always historically kept [IT equipment] for a longer period of time," he says.

Refresh Cycles
Every two years 0%
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Every two years
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NOTE: Percentages may not add up to 100 because of Rounding.

SOURCE: UBS Investment Research survey of 50 CIOs and 10 VARs, June 2005.

Copyright © 2005 IDG Communications, Inc.

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