“It’s really nice not to have a car payment” –I don’t know how many times I’ve uttered those words over the last 17 years.
It burned some oil and wasn’t exactly efficient with the gas, but it did the job.
You would think that determining the TCO for a car is easy. There is the cost of gas, repairs, taxes, insurance and depreciation. Add up all of those, and the case for keeping the old car was obvious.
One never really knows what is going to fail next though. After having to call roadside assistance 3 times in last year, it was time to recognize that unreliability has a cost – and so I found myself at the car dealer last week.
I see a similar behavior from some of our customers when it comes to the question of upgrading. “The old hardware is paid for”, they say. “Sure, it costs a bit more to get support from SUN/HP/IBM/Oracle/Amdocs, but we don’t need new features and can’t justify an upgrade”. And so they keep things running – if something fails, they call “roadside assistance”, and we get them back on the road again.
Eventually, though – the cost of running old systems surpasses that of upgrading. Thanks to Moore’s law, the advent of virtualization and open-source software such as Linux and JBOSS, you can get the same performance with a fraction of the cost of the systems you are replacing. And with this, generally lower support costs. If you look across ALL of the costs of running a billing system and incorporate hardware, datacenter, staff, support and maintenance – upgrading makes financial sense just from a savings perspective.
I replaced my 17-year gas guzzler with a Nissan Leaf. Sure, I have car payments again, but my cost per mile is down by 90%, my maintenance expenses should go down similarly, and I expect many years of higher reliability. Over the next 36 months, I should break even on this decision, and then enjoy several years of cost savings. And – that’s not even assigning a value to some of the improvements that have happened in safety and entertainment over the last 17 years.
If you are running hardware or software that is more than 5 years old, the chances are excellent that you can actually save money by upgrading – even if their business needs haven’t changed.