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October 2018, Vol. 1, No. 4

Invest in an IT infrastructure upgrade -- or keep fixing it

A major IT infrastructure upgrade frequently lands at the bottom of to-do lists. It's just easier -- most of the time -- to extend maintenance contracts and maybe do a few minor upgrades to keep the systems operable for another year than to go through the laborious process to purchase and set up new equipment. This raises a difficult question: When does extending the life of the equipment start to cost more than a replacement? On the surface, the maintenance contract grows most visibly on a steep curve after year three. It's not unusual to see double-digit cost growth in years four and five and beyond. But because support cost increases are still lower than that of an equipment replacement, management tolerates the hikes. The figures can sting a budget, but it's not painful enough on its own to force an IT infrastructure upgrade in year one. However, when you add up the support costs over several years, the numbers become staggering -- and there's the real problem: We often look at things only in terms of this year or next year,...

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