Panel: putting money into IT will save money in the long run

Canadian corporate businesses with aging fleets of desktop and notebook PCs have a false belief they are saving money by postponing capital expenditure on IT, according to a panel of Canadian experts.

This was part of a round table discussion called “Are you Getting the Most Out of Your IT Investment?” which was hosted by Intel of Canada at the Fairmount Royal York Hotel in Toronto on Wednesday. Four panellists discussed several topics including increasing security challenges, decreasing support for older software and maximizing employee productivity by refreshing and updating IT within Canadian corporations.

Doug Cooper, country manager for Intel of Canada, who acted as emcee for the event, said the current soft economy has caused a slow down in the corporate client refresh cycle, and by sharing best known methods (BKM) of deployment of IT, the group hoped to shed some light on the lifecycles of desktop and notebook PCs.

Cooper said there are two centres of wisdom that revolve around the refresh cycle. The first is making sure there is a plan in place to change over existing infrastructure. The second is to realize the consequences of both having a refresh cycle in place, and choosing to ignore the need to upgrade.

Intel follows a three-year refresh on desktop PCs and a two-year refresh cycle on notebooks, he said. “What we found is that 25 per cent or less [of Canadian businesses] expect to refresh [PCs] on a three-year basis,” Cooper said. He said most of these companies expected to use their current IT systems for longer.

The panellists agreed that deferring the refresh cycle for PCs would only create larger challenges down the road.

Many Canadian businesses have been pushing the need to replace both infrastructure and software within their corporations from three years to as high as four years, said Vito Mabrucco, group vice-president for IDC Canada Ltd. in Toronto.

In many cases businesses are not moving fast enough to provide the enhancements corporate clients require, as well as providing them with flexible business needs, he added, citing research conducted by IDC.

“The latent pain needs to come forward,” Mabrucco said.

Some of that hidden pain might include that fact that PCs that are three years or older have increasing failure rates; security systems on older operating systems are not up to date for current hackers and virus programs; support for older operating systems is starting to decline, as many companies such as Microsoft Corp. are no longer providing support for older systems; newer software doesn’t run on older systems; and there is an increasing demand for wireless technology.

Mabrucco said there are nine million installed units in the Canadian corporate market that are facing a refresh period, after being installed in 1998 or 1999. He estimated that 60 per cent of those installed desktop and notebooks are over three years old, if not older.

Within the next year, IDC is predicting that the Canadian economy will see a growth rate of 2.5 to 3.5 per cent of desktop and notebook PCs, which amounts to $5.4 billion, Mabrucco said.

“That represents a large market,” he said.

With larger global forces at play, not staying on the cusp of evolving technology could also be a disadvantage, Mabrucco said.

Cooper added that companies might be at a competitive disadvantage against companies that are more proactive in the IT department. He also said that companies that do not refresh within three years see increased spending for support.

Harry Zarek, president and CEO of Richmond Hill, Ont.-based Compugen Inc., said pushing the lifecycle of desktop and notebook PCs will start to impact overall employee productivity, and will also have a significant impact on security within companies.

All four panellists agreed that threatened security from not upgrading IT is a huge driving factor behind deploying a refresh cycle.

“Making the business case is touch because you can’t show cost savings or return on investment (ROI), but you can save down the line,” Mabrucco said. The panel also discussed the growing requirement of being wireless today.

“Being wireless and mobile takes corporations to a whole new level,” Cooper said. “Individuals are becoming more productive than they were before.”

George Atis, partner with McMillian Binch LLP, and the founder and chair of the technology practice group, said his law firm went through a refresh cycle within the last two years. Among other issues, the company considered the future needs of the lawyers within the firm as a way to drive the upgraded infrastructure to a wireless LAN (WLAN).

He said the top three reasons his company required a refresh cycle was for support, interoperability and speed/reliability.

His company justified the refresh cycle with a few indices such as: happy customers with improved response time from the end-users; happy workforce with lawyers who can work anywhere at any time; and the productivity potential, as the system users increased their use of applications through wireless access.

In related news, Intel of Canada announced three Intel Pentium 4 processors supporting hyper-threading (HT) technology and a trio of chipsets.

The processors include 2.80C, 2.60C and 2.40C GHz, and come equipped with HT technology and an 800MHz system bus. The chips include: the 865G and 865PE, formerly code-named Springdale, and also support HT technology and Intel’s 800MHz system bus. The other chip included in the launch is the 865P. [Please see Intel’s Springdale appears in new PCs; Intel to announce Springdale chipset Wednesday.]

Intel of Canada is on the Web at