Tough Love on Hardware

Over time, the lesson on the true cost of cutting corners has been drummed home.
By David Markus

The cost paradigm has shifted. Once upon a time the rule of thumb to IT costs was 1/3 hardware, 1/3 software and 1/3 tnstallation and services. That was when a PC cost $4000 and software was expensive.

Today computers are cheap and software is cheaper than it once was if you are buying common desktop applications. However, the complexity of management is such that no one individual can manage all of your technology alone anymore. So now my rule of thumb is hardware 10%, software 25%, installation and maintenance 65%. Contact me if you want to haggle on the details of this.

Any business owner knows that the ultimate discipline in running a business is expense. When we cut corners in the setup of our business it costs us money later. This is true of our HR policies, our accounting practises and collection practises, and is also true of our IT systems, both hardware and software.

My point is that saving money by purchasing cheap hardware is a false economy, as the downtime and additional services required over a three to four year period of ownership are far higher than the cost of getting the right hardware first time. Standardising on one style and one brand will lead to the lowest total cost of ownership possible.

As to my own experience, when I started Combo in 2002 I started selling cheap PCs. They were made of quality parts but they were not top-shelf. Over time I found that one in 20 PCs on average was delivered from the distributor to my clients in a non-working state or failed within 24 hours of delivery. In each case, hours of hassle followed to get the hardware replaced.

In over five years since we started selling top brand equipment, only a couple of PCs have failed in the same way, and in each case one phone call to HP saw them fixed within 24 hours with no additional expense to myself or the clients.

I have many examples of hardware faults causing days of downtime for clients that have come to us during or after these disastrous periods. It just is not worth the extra cost to your business.
So before you make another hardware purchase think about the benefits of consistent performance and limited downtime. It will inevitably justify the additional expense on quality equipment up front.

David Markus is the founder of Melbourne’s IT services company Combo. His focus is on big picture thinking to create value in IT Services for the SME sector.