New vs secondhand vs rebuilt / refurbished PCs for schools

OK, this is a big subject of discussion for schools. Should your school buy new or second hand PCs, or look at rebuilding existing computers it already has? In NZ there is no direct funding for computer hardware. Schools have to make the most of their tight budgets and the cost of computer purchases adds up.

First, what is the useful age range of modern computers? Although in many cases, even today, the base hardware can run for 10 years or more, such a computer will not be able to run modern operating systems or software. It doesn’t matter which OS architecture is being discussed – if you want a PC that can do all the whizz-bang latest things, especially high demand applications such as gaming, it will have a limited life. I would say this life is about 6-8 years. If you have very low demand needs, such as many home users do, the PCs could keep being used until they physically wear out. If you choose to use Windows, as I do, then it is useful to upgrade your PC about every 5-6 years according to the timetable of either major or minor Windows releases (MS alternates major and minor Windows releases). The same PC should be good for two releases.

Second, how fast does a new computer depreciate in cost? I would say at about $100 per year. A new PC for education might cost you around $800. At 6 years old, you might be able to resell it for $200. These are very approximate numbers of course. It pays to add up these numbers when you look at the argument of second hand vs new, because there is, I would argue, precious little money to be saved on second hand purchases unless you are really short of capital (in which case leasing might suit better).

Third, how much does it cost to rebuild an existing PC? The economic case for rebuilding really only kicks in at 6 years or more of life, when it can be compared favourably to the cost of complete replacement. To make this case work, the old computer has to be worth next to nothing and you have to have free labour for the job and a very cheap supply of parts. A rebuild as defined for the purpose of this article is replacing the motherboard, CPU and RAM, and it is quite typical that all three of those would have to be replaced together, such is the rapidity of change of signalling / interface standards in modern computing. However in some cases you would also be replacing the power supply, hard disk and CD/DVD drive. If the chassis doesn’t fit the components (particularly true of proprietary brand PCs) or is obsolete and would need to be replaced as well then the job is not worth doing at all. It is also worth noting for the OS licensing issue that replacing the motherboard with a different type voids an existing MS OEM license for a PC.

As an example, I’m rebuilding my old home PC, which I can do economically with free labour and a cheap parts supply. It is costing me about $370 (ex GST) to replace the motherboard, CPU, RAM and power supply in an existing chassis I already have, and with existing HDDs and a DVD writer that I already have. These are for the cheapest Intel brand motherboard, Intel dual core CPU, 2 GB of DDR800 RAM and a modern ATX2.1 power supply. These all fit into an existing 5 year old chassis which I got for nothing. For Windows I will need a new OEM license as the sticker on the side of the case is now invalid. These costs all add up and make it difficult to justify rebuilding in the majority of cases.

Fourth, should you buy brand-name computers, or generic? There is no doubt that brand name PCs have made a heavy market penetration in recent years, due to aggressive pricing and advertising. In turn, many local assemblers have gone out of business. However in the education market, Insite Technology and Cyclone Computers continue to offer a viable local alternative to the multinationals. A very important consideration is to look at the total cost of ownership of your computers over their whole life, which for many schools will be more than the three years of warranty coverage. Proprietary spares and supplies for brand name computers are often very expensive and after five years you may not be able to get new parts, whereas your locally assembled box generally uses standardised parts that are available from multiple suppliers (Watch out however for small form factor chassis that may use a custom power supply). It is for this reason that our school buys locally assembled PCs, just as we buy our printers on the basis of their total lifetime cost including the major consumable pricing.

Fifth, what are the major factors of computer design that affect speed? The biggest is probably the speed of the main memory. In the last 8 years (writing this because our school still uses some PCs that old) RAM has gone from PC-133 MHz SDRAM to DDR-266 through 400, to DDR2-533 through 800 and now some higher spec systems are doing 1000 or even 1300 MHz memory. Every advance has made a big difference. The amount of memory also matters, although it is less significant as the PC ages because then the speed becomes more significant. CPU speed is less significant because the speed that the CPU can communicate with other components has much more of an impact, due to the fact that such communications are happening all the time. However the increase in CPU cache sizes has a big impact. Next would be disk speed. IDE gave way to the faster SATA, which has gone to SATA-II with a doubling of the data rate in recent years. If you do a lot of graphical work then the speed of the graphics processing components will be significant, here a separate card has a big advantage over most onboard chipsets.

Sixth, are there advantages in standardising the design of your PCs? Yes, there are. It is tempting to replace older PCs individually as they break down and therefore end up with a hotch potch of different PCs of various specs and ages. However, the costs of supporting these will be increased. Once your school gets to, say, 50 computers or more, you start to be able to realise the benefits of using imaging software like Symantec Ghost to set up PCs from scratch, and to update them regularly. This is a lot easier to do if the PCs are all very similar in spec because you don’t have to handle multiple different drivers and installed devices that are in them.

Now, to the core argument. New or second hand? There is one thing that can’t really be changed and that is that the life of a PC is about the same as I have noted above, and this is relatively short. We can’t really compare buying a computer with buying a major electrical appliance or a car. The computer’s useful life and thus our replacement cycle is basically determined by the software it can run, not by the longevity of the hardware. As new versions of OSs and major software packages are released, they demand more of the hardware resources, and consequently the computer becomes slower in relation to new computers, and a point is eventually reached where the computer is just too slow and the performance particularly of graphics and sound is compromised. Adding to this, and fairly significant, is that software suppliers stop supporting their software on older OSs. All these things together drive the short working life of an average PC.

The big issue is that if you buy second hand, you are not saving much money because while it may be cheaper it also has a shorter working life. There are also higher support costs associated with second hand computers, both from the fact that they are older and probably going to break down more, and from having to replace them more often. If the PCs are proprietary then they will be expensive to repair, and oftentimes may not be able to repaired economically at all. When it comes to buying second hand computers, there is also less choice in local vs proprietary in general, the local assembled PCs are often a lot harder to find because of lower market penetration. But when you buy new, the choice is obviously greater. Whilst we do have a number of companies refurbishing older computers in New Zealand for the education market, most of what they are offering is proprietary and therefore the same disadvantages apply, therefore I am unconvinced of the merit of their product.

So on balance I support the argument that a school should look to buy new PCs for a working life of 6-8 years, replace all of them at the same time, and buy them from a New Zealand based assembler that uses standardised PCs parts in their systems. Leasing options are available for NZ assembled PCs as an option for schools that can’t quite get the cash together, but of course it adds up to a higher total purchase cost.