Budgeting for Technology Costs
Budgeting for technology costs is difficult. We often run into clients that don’t budget for these costs at all. They are then often caught with tough (and costly!) surprises when a workstation or server goes down.
For smaller companies, this may work as the cost is lower (due to the lower volume), but for companies with a server and 5 or more workstations, a budget is a MUST.
Let’s say the average lifetime of a workstation and/or server is 3-5 years. If a company has 10 workstations and 1 server, the total replacement cost would breakdown as follows:
(please realize I’m using these numbers for ease of example. Actual costs may vary)
Workstation: $1,000 + $200 cost of transferring to a new PC = $1,200 x 10 = $12,000
Server: $5,000 + $1,000 cost of transferring to a new server = $6,000 x 1 = $6,000
Switches/Printers/Misc. Hardware = $2,000
So we have a total replacement cost for the company of $20,000
3-Year Replacement Plan
If you want to go with the 3-year replacement plan, you are looking at a total of $6,666.66/year. You could spread out the costs by simply replacing workstations, and some networking equipment over the first 2 years. You then replace the server in the 3rd year. You then start the replacement plan (by replacing the workstations again) in year 4
5-Year Replacement Plan
By choosing the 5-year plan, you can plan on replacing the workstations and networking equipment spread over years 1-4. In year 5, you then replace the server. With this plan you can budget to spend approximately $3,500 in 4 of the years, and $6,000 in the 5th year.
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