Obsolescence in computer technology<\/p>\n
By Y. Prasetyo<\/p>\n
DECATUR, Georgia (JP): I purchased my first computer in 1985
\nin Bandung, an Apple Ile, and expected to use it for a long time.
\nI used primarily the word processor, limited spreadsheet, the
\nMultiplan and Supercalc, and some games.<\/p>\n
Two years later, I could hardly find any new software for my
\nApple computer. I disposed of the computer three years later when
\nit broke down and nobody could repair it. Then, in 1988, I
\npurchased an IBM AT, the best product at that time. A year later
\nI found that my \"new\" IBM computer was no longer an up-to-date
\nproduct. There were IBM 8086 series compatible computers on the
\nmarket with \"Intel Inside\".<\/p>\n
My obsolescent problem was not uncommon. On a larger scale, I
\nfound some companies facing the same problem. Last year I visited
\na bank in Atlanta. This bank owned two old IBM system 36 mini-
\nmainframes. They bought the first mainframe six years ago and
\npurchased another one four years later because they could not
\nafford to change to a newer system such as IBM AS 400. The
\nmanager of data processing said that the cost to change to a
\ntotally new system was too high and as long as the machine ran
\nwell the bank insisted on keeping these two \"dinosaurs\". Even
\nthough there were newer, faster, and more efficient systems on
\nthe market, they would keep these machines as long as the
\nmainframes worked.<\/p>\n
New machines<\/p>\n
Many companies in the late 1980s that bought thousands of IBM
\n286 machines have found that they are virtually worthless in
\ntoday's after-market. The main reason for this tragedy is there
\nare many new machines that are more powerful and faster. Another
\nreason is that there is not much new software that can run in
\nthese \"old\" 286 machines; something that happened to me just a
\nfew years ago with my Apple computer.<\/p>\n
For example, one of the most popular products on the market,
\nWindows, runs poorly on most 286 PC's and won't run at all on a
\ncomputer with an earlier model microprocessor. Even the 386
\nmachines are facing a rough future as they will not be powerful
\nenough to run graphics software, the next \"hot\" product.<\/p>\n
According to an old survey by the American Institute of
\nCertified Accountants, computers were expected to have five to 10
\nyears life-cycle. Today, that life-cycle is somewhere between two
\nand three years. Since computers have become the \"heart\" of
\ntoday's business, a shorter computer life-cycle is a dilemma. The
\nproblems of many corporations range from how to dispose of old
\nPC's to how to depreciate the new computers in a way that will
\nsatisfy the company's shareholders and tax needs. The shorter
\nlife-cycle pattern, caused by new product invention, can also be
\napplied to other peripheral products such as printers and
\nmonitors. Laserjet printers are replacing the old dot-matrix
\nprinters and High Resolution monitors are expected to take over
\nfrom EGA or VGA monitors.<\/p>\n
There are suggestions about how to recycle old computers. The
\nfirst suggestion is called \"The Trickle-Downed Theory\". The
\n\"power users\", such as a graphics programmers and number
\ncrunchers, can hand their computers down to \"less demanding
\nusers\" like secretaries or mail room operators. Just because a PC
\nwon't run Windows does not mean that it can't perform other,
\nmore routine office tasks such as printing, word processing or
\nelectronic mail transaction. Employing this method, a company can
\nretain and depreciate a computer as long as it runs.<\/p>\n
The second suggestion is called the \"Home Computer Solution\";
\nselling computers to employees for home use at a nominal price.
\nThe price should be reasonable enough that employees would want
\nto purchase these used computers. Offering a low-cost computer
\ncan boost employees morale in the workplace by encouraging them
\nto work at home after office hours. This suggestion can also cut
\novertime costs for the employers if the purchasers are willing to
\ndo their extra work at home.<\/p>\n
The third suggestion is direct sale to a computer exchange
\nmarket. This may not be easy for older machines, but newer
\ncomputers such as 386 PC's may still have value to users with
\nless-demanding computer needs. In Atlanta, the American Computer
\nExchange is an example of this alternative. The used PC's prices
\nare easily available in various publications and newspapers.
\nSelling old computers in bulk, may result in a better price since
\nthe seller can sell other devices at the same time rather than
\nselling each part separately.<\/p>\n
Two solutions<\/p>\n
The fourth suggestion is charitable contribution when trading
\nin the old computer system is not necessarily the answer. With
\nold-model computers selling for so little, many companies are
\nopting not to unload them at fire-sale prices but to donate them
\nto schools, charities, and non-profit organizations. A company
\nmay be able to reap a substantial tax write-off and, at the same
\ntime, generate community goodwill. Even the oldest personal
\ncomputer is still more powerful than the latest typewriter or
\ncalculator.<\/p>\n
I believe there are two solutions in handling the risk of
\nobsolescent in having a computer system. The fist solution is to
\npurchase the latest machine on the market. With Intel chips
\ninside in more than 75 percent of the PC's on the market,
\npurchasing a 486 machine is a better choice than a 386 machine
\nand a pentium machine is a much better choice than a 486 machine.
\nMany software companies have started making new programs that can
\nrun only with pentium microprocessors. By purchasing the latest
\nmachine, we can expect to have not just a longer life-cycle, but
\nalso to use it longer since the new machine will be able to run
\nnew software that won't run in old machines.<\/p>\n
Second, for businesses, use a shorter depreciation recovery
\nlife. Since computers' life-cycles are much shorter than any
\nother office machine, a three-year recovery life depreciation
\nseems pretty reasonable. The company will retain a lower book
\nvalue and has the flexibility either to sell the old machines
\nfaster in order to get a better market price, or contribute them
\nto get the tax write-off.<\/p>\n
Personal computer technology has changed dramatically in the
\nlast ten years. The newer products are always better than the
\nprevious ones. The best way to stay on the cutting edge of
\npersonal computer technology is to ride the wave, stay on the
\ntop, learn about the new things that are available and adopt a
\nproper learning attitude. Machines without users are useless.<\/p>",
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