Spending tips for each stop on the IT lifecycle

Data center equipment refreshes are expensive and time-consuming, but there are ways to ease the most arduous steps of the IT lifecycle -- and possibly even make a little money.

Data center hardware lives to serve the applications that run on it. In a world of increased hardware commoditization, virtualization and cloud, IT pros have expanded options during the product lifecycle.

The average IT product lifecycle is roughly five years, but some applications reside on the same hardware for much longer than that.

The danger is that the application becomes inextricable from outmoded equipment, said Andy Cvengros, vice president of data center assets at Jones Lang LaSalle, a Chicago-based real estate services provider.

The most important step when migrating to new equipment is mapping the interdependencies among apps on the hardware, the different virtualization hypervisors in use and how the workloads will change once on the newer hardware.

In most cases, IT refreshes mean upgrading to the faster, more intuitive version of the existing platform. However, when a different platform offers better features, significant performance increases or more reliability, consider changing course with the hardware during the refresh.

"Don't buy into a technology for technology's sake if it's not a great fit," said Irwin Teodoro, migration director at Datalink Corp., a Minneapolis-based data center services provider.

Know your worth

IT equipment's working value to the organization -- its stored data and utilization -- should be weighed against its intrinsic value for resale. The optimal refresh time is when the intrinsic value levels off and the working value is in decline, according to Clive Longbottom, service director at analyst firm Quocirca in the U.K. Automated asset management tools help accurately gauge depreciation rates.

Once a server, network switch or other asset reaches the optimal retirement point in its lifecycle, the IT manager must decide how to divest it.

"Your [old] equipment is not worthless; it has 50% value for seven years," said Frank D. Muscarello, ‎CEO of MarkITx, an online exchange for IT equipment based in Chicago. "It's worthless to you."

Not all IT shops want to sell those used systems.

"You need to make sure they're cleaned of data completely; spending all the time auditing and sorting it out may mean you don't really get much profit out of selling at all," said Adam Fowler, IT operations manager at Piper Alderman, a law firm in Australia.

But if someone wanted the four-year-old equipment, Fowler said, he would definitely be interested in selling, with a realistic expectation of the payback. IT equipment's intrinsic value lasts because other organizations need spares and parts, but that's not the only market for used systems.

Cloud providers either buy quantities of the same hardware components for consistency, or plug various components together under a virtualization layer without much interest in the brand names, Muscarello said.

Muscarello also recommended selling older servers and network equipment to companies with longer IT refresh cycles, small and medium-size businesses without high-performance IT, or companies building up new capacity to serve emerging markets.

Another option is the step-down IT refresh method, where the most important workloads live on the newest hardware. Instead of selling or clearing out the old systems, IT can use them to host less-critical workloads until it becomes too hard to find spare parts for the oldest hardware.

There're a lot of things I'd need to be happy with when buying secondhand.
Adam FowlerIT operations manager at Piper Alderman

The buyers' market

Buying used equipment removes much of the guesswork of pricing a new server, with optional add-ons and support contracts. With a virtualization layer atop it, most data center hardware can support diverse apps with changing needs.

"There're a lot of things I'd need to be happy with when buying secondhand," Piper Alderman's Fowler said.

Used equipment rarely comes with a vendor's warranty and support, so he would need to track down spare parts for the system, verify that they work, and train staff to install them.

Vendors usually offer services surrounding the installed equipment as well. A set deadline to acquire the equipment and have it up and running could be harder when buying from a secondhand marketplace or broker.

Time to go

There's no set time to upgrade to a newer generation of IT equipment.

Applications' resource requirements are one major factor that drives the IT lifecycle. But decisions about facility space, such as choosing to collocate or build a new data center, are just as likely to affect timing, not to mention the fact that virtualization extends the life of hardware.

As organizations revamp IT for digital business, they realize the old facility that housed legacy systems won't suffice for additional, denser workloads, or that virtualization and more powerful hardware have left the data center underutilized and inefficient, Cvengros said.

Time a colocation lease with your IT refresh cycle, setting up the new gear in the new space while operating the old gear to avoid a power and cooling burden imposed on the legacy facility. This slow progression and overlap protects workloads from down time.

Smart IT organizations move to outsourcing in waves anyway, to limit the impact on business operations, said Datalink's Teodoro, so it fits naturally with refresh stages. Plan about 24 months out for this combo colocation move, and schedule flexibly -- relocation dates shouldn't take precedence over quality of operations.

An IT lifecycle refresh is also a good time to create efficiencies by adding new management technologies. But Teodoro said it can be too many complex projects happening at once for some IT organizations to manage.

This was first published in August 2014

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