Retirement planning: Your servers need it too
By Rich Freeman
For better or worse, companies are keeping their servers around longer. Thanks to tighter IT budgets and more durable and powerful hardware, most companies no longer replace servers every two or three years. Now, some wait as long as six years. Is this a good thing?
In Summary:
| • | Businesses should base server replacement cycle on concrete performance metrics, not depreciation schedules. |
| • | Creating a long-term server replacement cycle that reduces your odds of updating servers too soon or too late. |
| • | Assigning servers to new and less demanding tasks, rather than discarding them, can be a great way to get more value from old hardware. |
According to the 2005 Global Server Survey from Boston-based Yankee Group Research Inc., 58 percent of organizations worldwide now retain their file and print servers an average of four to six years.
Whether this is too long or just right depends on a number of circumstances — although most experts agree that waiting longer than five years increases your risk of performance issues.
But companies that plan ahead and think strategically will end up making the smartest, most cost-effective decisions about when to go through their server replacement cycle, experts say.
And companies that put off a server replacement cycle simply to save money may increase their risk of weak performance and service outages. "That can have a domino effect not only on internal network operations but also on external interactions with business partners, suppliers and customers," says Laura DiDio, a research fellow at Yankee Group. Conversely, upgrading sooner than necessary is pointless and costly.
The best approach to setting server replacement cycles is to base your decisions on concrete network performance data and careful forecasts of your future needs. Approaching server upgrades methodically is the only way to know for sure whether new hardware will cost you more than it saves, or save you more than it costs.
Take performance data into account
There are few rules for when businesses should replace their servers, but, again, most experts agree that waiting longer than five years is usually a mistake. The percentage of servers experiencing some form of component failure jumps from 10 percent in year four to 50 percent in year five, according to James Browning, a research vice president at IT analyst firm Gartner Inc. in Stamford, Conn. Additionally, service contracts often expire at the five-year mark, and replacement part prices begin climbing then too. By year six, Browning says, rising support costs are likely to consume any funds you save by not buying something new.
That logic is a big part of why Wescom Credit Union, in Pasadena, Calif., upgrades its servers about every three years. "We try to step up to the newer hardware, because overall we have fewer problems when we use new servers," says Linnie Gooch, Wescom's manager of server administration and helpdesk.
Ultimately, however, the only reliable way to know when it makes fiscal sense to replace a server is to maintain detailed performance records and scrutinize them regularly for signs of aging, DiDio says. "You have got to do the housekeeping chores," she says. A machine that consistently tops 70 percent utilization or experiences above-average periods of unplanned downtime is probably costing you more than an upgrade would.
IT managers should collect vital operational statistics on a quarterly basis that grade network hardware on basic metrics, including reliability, uptime, bandwidth consumption, and CPU utilization, DiDio advises.
Darin Stahl, a research lead at analyst firm Info-Tech Research Group Inc., of London, Ontario, recommends using a tool such as Microsoft System Center Operations Manager to collect such key decision-making figures more easily.
Consider business needs when planning your upgrades
Collecting detailed network statistics is just the start. By combining those numbers with growth estimates from business managers, companies can not only make smart short-term upgrade decisions but also build a long-term server replacement schedule. "You have got to be looking at your needs both now and in the future," Stahl says. "Being in reaction mode all the time is just too costly."
A solid plan should factor in not just projected processing and storage needs but future operating system, database, and application deployments as well, according to Jerry Murphy, chief operating officer of analyst firm Robert Frances Group Inc. in Westport, Conn. "All of this stuff is interconnected," he says. Companies that maintain a blueprint for server software as well as hardware are less likely to find themselves running new software on underpowered hardware or old software on overpowered hardware.
Of course, deciding whether to upgrade hardware is often situational. For example, if a software upgrade requiring more powerful hardware is scheduled for release three years into a server's projected four-year lifespan, managers must carefully weigh the cost of an early hardware upgrade against the benefits of installing the software immediately. Ultimately, it should be a business decision, rather than a choice dictated by cost and product lifecycle considerations alone.
"Be very careful about trying to base your server replacements solely on depreciation schedules," Stahl says.
Consider reusing and recycling servers
Also worth considering is the possible reuse of old servers for new and less demanding purposes. For example, obsolete production servers often make perfectly acceptable backup devices, because their lower performance standards are good enough for brief emergency periods.
Just the same, Stahl advises companies to conduct a thorough analysis before assuming that repurposing hardware is the most cost-effective option. "It may make more sense to put in something more efficient," he says, as maintenance and power consumption on an aging server can be expensive.
It is all too easy, in fact, to be penny wise and pound foolish with server upgrades. Meeting the needs of your company's customers, partners and employees should always be your highest priority. Says Wescom Credit Union's Gooch: "Having a well-running system is worth more than a couple of dollars."
Rich Freeman is a Seattle-based freelance writer specializing in business and technology. He has more than 14 years of strategic marketing and communications experience in the IT industry.
