Great question.  Maybe you shouldn’t?  We talk to clients about this all of the time and have counseled many businesses into and out of replacing network equipment currently in place.  Often the issue if forced when there is an outage of an aging server but in our network support model we try to be more proactive about the process and help a business owner understand the potential business benefits to replacing a server, leaving it as is, or even extending the warranty for another year.

The first thing you should do in considering a server replacement is calculate the ROI for the project.  Unfortunately, there is no magic number for the payback of a new server as all businesses are different but we have compiled 10  Things to Consider when making this ROI calculation.   The list includes hard calculations like the average hourly wage of your employees and the amount of time spent on repetitive processes but it also considers less concrete items like peace of mind of the business owner as that is also definitely worth something in today’s stressful business world.

Some quick guidelines as to whether or not to replace would be:

Replace if:

• There a positive ROI (as discussed above) for the project
• The server is out of warranty (if it is, it will more likely have a hardware failure) and it can not be extended
• The server does not meet your basic business functions and is holding you back

Extend the Warranty if:

• The warranty can be extended and the server is meeting your basic business needs
• You do not expect your business needs for the server to expand greatly in the next 12 months
• You would like to replace the server and it is borderline, but you need to plan for the expenditure in the next budget cycle

Generally, a server will be an effective business resource for 3-5 years depending upon business growth.  After 5 years, server hardware can become unreliable, sluggish and apt to fail.  If you are in the gray area somewhere, you may want to consider calculating the ROI of replacement to see if there is a real payback for your business.

Download 10 Things to Consider when Calculating the ROI of a Network Server Replacement

Tags: 10 things to consider when calculating the ROI of relacing a network server, being more productive, budget, business success tips, generating operational efficiencies, small business, small business concerns, technology resource for small business

This entry was posted on Tuesday, October 20th, 2009 at 4:55 pm by Michael Giuffrida and is filed under Accounting, CEO, Operations, Technology Budgeting, Technology Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.