Aug 19 2008

Power Up

Enhanced processors can take a company's performance level up a notch — but first you have to make the business case for an upgrade.

Photo: Todd Winters
Sharmac Capital Management's Benny Medina upgraded the processing power of the company's workstations to help its traders make split-second decisions more effectively.

When a fraction of a second can make the difference between a good trade and a great one, it pays to have plenty of processing power on the desktop. That’s why Chicago-based commodities-trading firm Sharmac Capital Management recently invested in a major PC upgrade.


And though not every company has thousands of dollars riding on the speed with which users can click a mouse and refresh their data, IT decision-makers who are considering a system upgrade will find Sharmac’s experience instructive.

Benny Medina, Sharmac’s IT administrator, cites three main issues in any upgrade: performance, politics and payback.

Performance became a critical consideration when Sharmac rolled out a new version of one of its trading applications that seriously taxed the company’s existing Pentium 4 machines. The sluggish performance of the new application on older machines was immediately noticeable to Sharmac’s traders.

“Half a second is a lifetime to these traders,” Medina explains. “We had to address the lag right away.”

Medina didn’t scrimp on the upgrade. After careful consideration, he decided that a standard PC configuration would be insufficient for his purposes. Instead, he purchased HP xw8400 workstations and had them custom-configured with two Intel quad-core Xeon 2.33 gigahertz processors. This added several hundred dollars to the cost of each machine, for both the hardware and the labor, but it proved well worth the expense. Pilot testing of those systems verified that they would fully deliver the performance Sharmac required — with plenty of power to spare for any future improvements to the traders’ work environment.

Upgrade Politics

Medina points out that end users’ perceptions also play a role in desktop decisions. “With high-power traders, the sense that someone out there in the market has a competitive advantage over them can be as problematic as an actual performance shortfall,” he observes.

Tom Brown, CEO and senior consultant at San Francisco-based market research firm Power Decisions Group, seconds that notion. “PC upgrade decisions are often made based on who in particular is doing the complaining,” he notes. “Users in profit centers are much more likely to be heard than users in cost centers.”

David Daoud, an International Data Corp. (IDC) analyst, in Framingham, Mass., also agrees: “In today’s tough economic climate, CFOs are taking a ‘good enough’ approach to desktop provisioning. If users don’t think their productivity is being impeded, no one is going to spend money on an upgrade.”

As a result, IDC is seeing corporate desktop refresh cycles lengthening from less than three years to more than four.


What are your company's current plans to upgrade memory on servers and workstations?

27% We have already upgraded our systems.
38% We have no plans to upgrade.
19% We are currently upgrading our systems.
14% We are currently evaluating upgrade options.
2% Don't know

Source: 547 BizTech readers

That said, many companies still have compelling reasons to perform upgrades sooner — for example, to support major enhancements to their core business applications. Ace Clearwater Enterprises, a Torrance, Calif., maker of exhaust systems for defense and commercial applications, upgraded 50 of its desktops as part of an ERP system migration. Those desktops were configured with a 2GHz processor, 1 gigabyte of RAM, and a Gigabit Ethernet network card.


Now, with Ace Clearwater migrating to a newer and even more processing-intensive version of the ERP system, the company’s Director of Progress King Lum is doubling memory on most desktops to 2GB. “We can buy new computers so cheaply today that there’s no reason to upgrade chips in old PCs,” Lum says, adding that such upgrades are an integral part of his company’s overall commitment to quality and continuous improvement.

Of course, the growing use of web-based application architectures is helping companies extend the life of their PCs because those applications put far less strain on desktop processing capacity than traditional client-server apps. But end users’ changing computing habits can easily offset reductions in application-specific processing workloads. “People now keep large numbers of browser windows open simultaneously,” Brown explains. “That can really degrade the performance of an underpowered machine.”

Calculate the Payback

Ultimately, any IT investment has to be cost-justified. For Sharmac, the payoff came in the form of more profitable trading. Medina estimates that his company recouped the upgrade costs in a matter of months. “When you’re working with large amounts of capital, the ability to immediately see and respond to even the slightest moves in the market translates directly into thousands of dollars,” he explains.

ROI can also come in other forms. IDC’s Daoud recommends coupling performance-driven upgrades with “green” computing initiatives. Purchases of new PCs that meet energy standards such as Energy Star 4.0 and 80 PLUS can make a lot of sense to CFOs who are skeptical about spending money for performance alone.

Some companies deal with escalating workloads and ongoing financial pressures by eliminating PCs altogether. At Itasca, Ill.-based Ryan Building Group, director of information systems Michael Bautsch is migrating to diskless Wyse Technology terminals and shifting to central servers to avoid the costs of periodic desktop refreshes and PC administration.

Whatever decision they make, IT leaders have to think in business terms when it comes to changes in technology infrastructure, Daoud insists. “Budgets are tight,” he notes. “So no one is going to get approval for upgrades [today] based on technical requirements alone.”


IT Takeaway

Here are some points to consider the next time your IT shop upgrades its PCs:

• Think green. By incorporating energy-efficiency into an upgrade plan, IT departments can make a much stronger case. Some machines can deliver 70 to 80 percent reductions in energy costs, which is more than enough to justify the purchase of newer, more powerful computers.
• Be strategic. IT budgets are tighter than ever, which means that any new upgrade must be tied to an overhaul of a core business application, such as a back-end accounting system. An enterprise Vista upgrade is also a good reason to upgrade your PCs.