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Why sweating your assets no longer makes financial sense 

Why sweating your assets no longer makes financial sense 

Banking & FinanceDataTop Stories

Sweating your IT assets beyond the average three-year lifespan may have made financial sense 10 years ago, when businesses were looking to keep a lid on costs for as long as possible before investing in a hardware refresh, but today this is no longer a feasible option. 

“We’re still seeing organisations attempt to extend the longevity of hardware, in particular due to recent, tougher times, but they must be cognisant of that fact that this approach could have a far deeper impact on a business’s bottom line than ever before,” said Jaap Scholten, Head of Group Hybrid IT Strategy at Datacentrix. 

“The lifespan of hardware is typically three years, but we’re seeing companies attempt to stretch out the lifespan of their hardware for longer periods, even up to five years. And aside from the obvious risks, like equipment failure and greater vulnerability to cyberattacks, there has been a tremendous shift in where a business’ costs lie and this is also affected when using equipment beyond its optimum life cycle.” 

Scholten believes this point is of particular relevance to South African organisations, as the country has only recently emerged from its longest consecutive period of rolling blackouts, only to have load-shedding reinstated a mere two days later. 

“Power consumption has become a significant operational cost for local companies and unfortunately load-shedding is a dilemma that will not easily be solvable, even over the longer term. Older hardware is more power hungry and, in light of our ongoing blackout challenges especially, there are cleverer ways of ensuring that your technology stays up to date.” 

Scholten says that more modern infrastructure uses far less power than older hardware, a point reinforced by Uptime Institute, the global digital infrastructure authority, which states that over 65% of the power used by IT in data centres is used to process just 7% of the work and that this is purely due to ageing equipment inefficiencies. 

“So, the question is, do you opt to upgrade your hardware more regularly, using CAPEX budget, with a view towards energy efficiency and performance gains and achieving a faster ROI or do you decide against owning hardware completely?” 

Here, there are two potential choices to be made, he continues, the first being the option of leasing hardware from a solution provider. 

“This decision will certainly assist a business that is struggling to find CAPEX in their budget cycle, but it also raises the issue of whether it doesn’t then make more sense to embrace the second option, which would be to move to the cloud. Using a cloud service provider will remove the burden of hardware ownership and its related challenges – like power consumption – from the client, while also ensuring that the company still has access to scalable, powerful infrastructure with guaranteed availability.” 

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