A couple of weeks ago, we returned home from traveling, tired, and grimy after a very long cross-country flight. The only thing on my mind as I pulled into the driveway was a hot shower, a cup of chamomile tea, and my pillow – in that order. As the garage door opened, we could easily see a large puddle of water spread across the floor. The water heater blew while we were away. My heart sank.

It should not have been a big surprise. We had no idea how old the heater was. It was in the house when we purchased it five years ago. I don’t ever recall anyone checking it. It was left unattended. Fortunately, our plumber had an emergency 24 on-call service and they were there the next day to replace the water heater – at a premium cost, I might add. There was no time to shop around. My shower would have to wait.I could not help but reflect on a conversation I had with a client just a few days prior. He sought my help in planning for and messaging a request for funding to upgrade the infrastructure under his care. It was old, it was breaking, and it had been left unattended for too long.

Infrastructure is like that. Despite its large investment, hardware and network equipment does not last forever. Many would believe that outsourced data centers or cloud services have replaced infrastructure services. That is absolutely not the case. According to a 2019 SpiceWorks State of IT Budgets, 20 percent of IT budgets are spent on infrastructure. The Spiceworks research also shows the current reality is that 98 percent of businesses are running their server hardware on-premises.

Despite cloud and outsourcing initiatives, the total infrastructure cost has not changed over the last ten years. As early as 2010, infrastructure accounted for approximately 60 percent of the overall IT budget per Gartner. Cloud computing played a role in internal hosting cost reduction but, I believe consolidation, virtualization and cost of replacements played a more significant role in reducing overall infrastructure budgets. At the same time, Spiceworks research shows that the total cost of infrastructure is still around 70%. 

“Why on-premise at all?” some may ask.

On-premise solutions guarantee the maximum level of security and corporate data privacy with an expectation of maximum physical access to any information located on a server in your own data center. On-premise solutions are demanded by medium-sized and large business companies for whom internal data control and security would be the main priority.

The second consideration I see is performance and latency concerns associated with manufacturing control data. As network bandwidth capacity goes up and costs go down, performance should be less and less of a barrier.

Nevertheless, local communication network infrastructure equipment and servers (firewalls, routers, hubs, switched, access points) along with desktop equipment will continue to require on-premise hardware and services.

The bottom line, Infrastructure is here to stay, and infrastructure expense will continue indefinitely – or at least as long as the enterprise remains in business. Just as we replace our automobiles, roofs, and appliances, corporate IT infrastructure has a lifecycle with a requirement to be maintained and refreshed.

Here is the challenge. Small to Medium businesses often find themselves in the position of having to refresh their IT equipment. Very few have an IT Strategy, and the IT leader struggles with how to pull together an IT refresh plan.

I’ve been asked: “What’s an IT Refresh Plan?”

It is a portion of the IT strategy and roadmap that focuses on the IT infrastructure, server, storage, network, telephones, PCs, laptops, printers etc. and sets out when these need to be replaced. This is a plan that is best included in the broader IT strategy.

It purely concentrates on the age of equipment. There may be other reasons that equipment needs upgrading or changing, but the IT refresh plan will always require that you have an essential if not a firm idea of when hardware and software are coming to end of life and will need replacing.

As was the lesson from my broken water heater, it is always better to plan a replacement rather than wait until an essential piece of equipment decides to break down. Not only will you reduce downtime to zero, but systems will also operate more efficiently since computers get slower as they age. You’ll also be able to plan your budgets and negotiate better pricing. Knowing that purchases are imminent, you may be able to take advantage of the end of the sales period or special offers.

Having an IT refresh plan in place will also help with the standardization of your hardware and PC configuration. Standardization removes compatibility and communication problems, improves security, and enables scheduling of updates.

Why Do You Need an IT Refresh Plan?

Investing in hardware and infrastructure does not reap apparent business rewards. It is a utility. It is expected to be there and operating flawlessly when needed. Business leadership commits to funding what they need at the time of the need, especially if there is a promise of new or needed business functionality. Projects are often tasked with supporting the initial cost for equipment or services required to deliver the promised functionality. The process may even “account” for the trailing costs of the project. There most likely is some thought put into the whether you will standardize on Apple, Dell or HP hardware. When it is a new expense (or one they are struggling with), businesses tend to ‘bootstrap,’ looking for the best deal to do what they need at the time. The choice is not always the one with the longest lifecycle.