Blog / Budget Season

IT equipment has a definite life-expectancy. Factors that play into IT equipment’s life-span are: expired manufacturer’s warranty, inadequate capacity or performance, erratic operation, and unsupported features or software. In general IT equipment life-spans are:

• Servers: 5 years
• Network equipment (switches, firewalls, WiFi): 5 to 7 years
• Backup systems: 3 to 5 years
• Workstations and laptops: 4 to 5 years
• Emergency power systems (UPS): 3 years

This assumes you are using commercial-grade Tier 1 equipment (Lenovo, HP, or Dell servers for example).  If your equipment is lower-grade or consumer-branded, then life expectancy could be cut in half.

Software can be overlooked when considering life expectancy. Often, software is changed out at the same time as the hardware, but not always. Software may be upgraded to the newest version, but sometimes a new installation is required.  Here are some common software programs and their life expectancy:

• Server Operating Systems: 3 to 5 years
• Email servers (ie: Exchange): 4 to 5 years
• Database servers (ie: SQL Server): 4 years
• Backup systems: 3 years
• Anti-Virus systems: 3 to 5 years
• Firewall Cyber-security: 3 years
• Office: 4 years
• Graphics and Publishing: 4 years

Don’t forget to add a labour or service component to hardware and software upgrades.  Major server change-outs can incur many thousands in labour charges.

Of course, web-based applications are updated automatically by the vendor and are included in the subscription cost.  This leads me to popular industry trend; many software applications are moving to a monthly subscription model; whereby the software is continuously updated as long as a monthly fee is paid.  Office 365, Anti-Virus, backup software, and firewall cyber-security programs are now sold this way. This makes budget planning easier.

Most budgets are divided into Capital costs (purchasing major hardware and software), and Operating costs (monthly or annual recurring fees).  Be sure to include subscription renewals, service and support, and maintenance contingencies into your Operating costs budget.

The latest industry trend is to integrate all costs into a single monthly fee that incorporates ALLcosts; hardware, software, updates, service, support – everything IT related.  We currently have several clients using this model.  It makes for a single-line IT budget that is predictable and easy-to-understand. This is called Managed Service (or Solution) Provider or MSP.

Please contact me if you have any questions about IT budgeting – or would like help with yours.

Thanks