Are you EVER going to upgrade?

TORONTO — Technology users who are delaying hardware upgrade cycles to save a buck now may end up paying more in the long run, according to a panel of experts.

Hardware OEMs and affiliated industries such as software developers, channel partners and integrators, have seen refresh cycles for

PCs stretch from three to four years. When the Internet became an integral and essential part of doing business in the mid- to late-1990s, customers had to upgrade technology to adapt. “”By 1997, 1998, there was a clamouring where more and more people had to have the Internet to do their job,”” said IDC Canada Ltd. analyst Vito Mabrucco.

A few years later, the technology industry became swept up in Y2K preparations and customers followed suit. That marked the end of what Mabrucco referred to as the “”salad days,”” and the industry is still waiting for something to jar the next major cycle of upgrades.

Compugen Inc. president Harry Zarek pegged the cut-off point for the last wave of upgrades at September 1999. That was the last point at which customers could update technology and still reasonably expect to be prepared for Y2K.

Of the 22 million PCs in Canada, Mabrucco estimated that 60 per cent of them are three years old or more. “”We have a huge challenge in front of us in terms of replacement strategy,”” he said.

What customers don’t realize, concluded the panel — which also included Intel Canada country manager Doug Cooper and George Atis, founder and chair of McMillan Binch‘s technology practice group — is that delaying PC replacement is only delaying the inevitable. Taking advantage of relatively cheap hardware in today’s market may result in substantial cost savings down the line.

In 1999, customers were still installing Windows 95 and Windows NT 4 into their offices, said Zarek. Now they’re asking for four-year warrantees on any new technology they’re buying. “”The thinking among the customer community is that the lifecycle can support an added year. We don’t agree with that.””

The acceptable limit for a PC is three years, said Mabrucco. Beyond that, your technical support costs may begin to exceed what the machines are worth. He pointed out that vendors like Microsoft are withdrawing support for older versions of their operating systems in an effort to push customers towards new products and drive the industry forwards.

Customers may believe they’re able to live without the latest the industry has to offer, he added, but external forces beyond their control may necessitate an upgrade. One example is a growing awareness of the value of securing an IT environment.

“”For our firm, security is a given,”” said Atis. “”It’s a non-starter if you don’t have a secure environment. We can’t even make one mistake. Managability is second.””

It’s sometimes difficult to make a business case for security measures, because they’re preventative and don’t contribute directly to the bottom line. “”The real person that has to be convinced is the CFO,”” said Mabrucco.

It can be a hard sell, said Atis, but “”don’t leave the decision to the bean counter team only. I emphasize the importance of (setting up) a technology council.””

Atis said his firm is committed to keeping up with technology because it can be utilized in the service of clients. The No. 1 complaint lawyers hear, he said, is that they don’t make enough effort to stay in touch with their clients. A potential solution is to equip lawyers with wireless devices so they’re able to access e-mail on a remote basis.

McMillan Binch has progressed beyond the point where “”it’s not just a question of having Microsoft Word and a dial tone,”” said Atis. But for other companies, it may be their dependence on a supply chain that will necessitate a change in technology.

“”It’s going to be their customers and suppliers that is going to force the issue,”” said Zarek. “”I think it’s the whole communication area. If you can’t plug your business into that ecosystem, you’ll be isolated very quickly.””

There are companies that will continue to squeeze the last few drops of usefulness out of their older systems, and for some of them that will work for a time. In certain cases, companies segment their IT purchases based on need, said Zarek. Some departments may be able to make do with older hardware, others may run applications that require up-to-date equipment.

But upgrade issues may remain unresolved for some time for the industry behind technology and its customers. “”The ‘what’s next?’ question is still out there,”” said Mabrucco.

Comment: info@itbusiness.ca

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