The finance director asks the question every March, and it’s almost always phrased the same way. “How much should we be budgeting for IT hardware next year?” The honest answer, the one nobody enjoys hearing, is that it depends entirely on when you last bought what, and there isn’t a single annual figure that works. The number swings between £4,000 and £40,000 depending on which year of the cycle you’re in. That swing is what makes hardware refresh feel chaotic, and it’s also what makes it the easiest part of the IT budget to plan once you commit to a frame.
The 3-5-7 frame is what we’ve landed on after years of running this conversation: three years for the things that get worked hard by humans, five years for the things that sit in a rack and run without complaint, and seven years for the long-life infrastructure that, if specified right, ought to outlast two laptop generations. Different lifespans for different jobs, all on the same calendar.
Why a frame matters more than a policy
Most SMEs we work with don’t have a hardware refresh policy. They have a habit: replace things when they break, or when somebody complains loudly enough. That works in the short term, since nothing gets bought that wasn’t strictly needed, and it falls apart in the medium term because everything ends up being bought at once.
It’s a pattern the founders saw repeatedly running IT for SMEs before JMO existed. A 25-person business that hasn’t refreshed laptops in five years suddenly needs to replace 19 of them inside six months because the warranties all ran out, batteries are failing, and Windows 11 won’t install on the older models. The bill lands at £28,000 in a single quarter. The same business, on a rolling three-year cycle, would have been spending £9,000 to £10,000 a year smoothly, the same total but a vastly different cash-flow shape.
The frame turns hardware from an unpredictable shock into a planned monthly cost.
Common failure modes
Before the frame, what we usually find:
- One vintage of everything. All the laptops bought in 2021, all the servers bought in 2020, all the switches bought in 2019. Every cycle hits as a wave.
- No write-off discipline. Old equipment sits in a cupboard because “we might need it for a temp”. Five years later there’s £8,000 of unsellable kit blocking storage.
- Warranty drift. Devices out of warranty get used until they fail. Failures are unplanned, expensive, and almost always happen on a Monday morning.
- Spec inflation. Each refresh, somebody spec’s the new laptops three notches above what’s needed because “they need to last”. The result is over-spec’d, expensive, and the cycle still happens at the same interval.
- Mixed estate. Some users on three-year-old kit, some on six-year-old kit, with no logic to which. Productivity differences become a hidden cost the business never quantifies.
The 3-5-7 frame addresses all of these without needing a heavy policy document.
The 3-5-7 decision frame
Three lifespans, three categories, with every device the business owns assigned to one of them.
Track 3: laptops, mobile phones, frontline workstations
What this means in practice: anything an employee picks up, carries around, or uses for several hours a day, on a 36-month refresh.
Three years is the sweet spot for endpoint (the laptops, phones and tablets people work on) hardware. Battery life starts to degrade meaningfully at year three. The component-failure rate climbs after year three: keyboards, hinges, ports, fans. Standard business warranties run 36 months, so year-four devices are unsupported. And the productivity loss from a slow or unreliable laptop is real and measurable, even if it doesn’t show up on a P&L. Replacing the laptop costs about £1,200; one lost day for the user costs more.
The refresh doesn’t need to be all-at-once. Stagger purchases across the year so cash-flow is even: buy a third in spring, a third in autumn, a third the following spring. After the first cycle, the estate is permanently rolling.
Track 5: on-premises servers, network switches, WAPs (wireless access points, the WiFi boxes on walls and ceilings), peripherals
What this means in practice: the kit that lives in a rack or on a wall, mostly doesn’t get touched, but matters when it fails.
Five years works for infrastructure because the failure curve is different. A server that’s been running well for five years will probably keep running well for another two, but the manufacturer’s support window ends at five, replacement parts get scarce, and the firmware stops getting security updates. The risk shape changes around year five even though the device still works. Switches and access points (the boxes on the wall that broadcast WiFi) follow the same logic.
We refresh on a 60-month cycle for these, but we usually plan the replacement at month 48 so there’s a year of head-room, because server migrations are not afternoon jobs.
Track 7: long-life infrastructure, cabling, racks, UPS, CCTV
What this means in practice: the physical layer that, if specified right at install, should outlast multiple cycles of the kit it supports.
Some infrastructure isn’t meant to be replaced on a fast cycle. Cat6a cabling (the data cable in the walls) in the walls. The 19-inch rack the servers sit in. The uninterruptible power supply (UPS, the battery-and-electronics box that keeps the network running for a few minutes when the mains drops) chassis, with its batteries on a separate cycle (covered in the separate UPS post). CCTV camera bodies, if installed cleanly. These should be on a 7-year-plus horizon, with maintenance and minor refreshes in between but no full replacement until the technology shifts beneath them.
The discipline here is at the install: over-spec slightly, buy the rack with two more U than you think you need, run two cables to every desk rather than one. The marginal cost at install is small; the saving over seven years is significant.
How to apply the frame
A simple sequence to get the estate onto the frame:
- Inventory everything with a date. Every device, when it was bought, when it goes off warranty, which track it sits on.
- Plot the next 36 months. Each device gets a replacement date based on its track. Lay them out on a single timeline.
- Flatten the peaks. If 18 laptops all hit refresh in Q2 2027, move six to Q4 2026 and six to Q4 2027. Slightly early or slightly late is fine; smoothing cash flow is worth it.
- Set a monthly budget. The total cost across the 36-month plan, divided by 36, gives the monthly accrual; finance puts it in the model and hardware ceases to be a shock.
- Review annually. New people, new roles, technology shifts. The plan needs a yearly refresh, usually a 30-minute session with the IT lead and finance.
Where SMEs trip
The two we see most often:
The first is treating the frame as a hard rule when it’s really a default. If a laptop is genuinely fine at year four (light user, battery healthy, no failures), extend it by 12 months and put the saving against next year. If a server is showing fan failures at year three, replace it early. The frame’s job is to make the conversation easy, not to dictate the answer.
The second is forgetting the disposal side, because old kit needs to leave the building. WEEE-compliant disposal (the UK rule for getting rid of electronics safely), data destruction certificates, asset register updated. In years of inventory walks the founders have seen storerooms full of decade-old laptops because nobody had a process for getting them out, and that’s a hidden risk, because old kit with old data on it is a breach waiting to happen.
What good looks like
When this is working, the finance director’s March question has an immediate answer. “Next year is £14,000 for laptops and £6,000 for one server. £20,000 total, £1,667 a month, on plan.” The IT team isn’t firefighting failed kit on a Monday morning. Users aren’t carrying around laptops that take three minutes to boot. The disposal process is clean, the warranties line up with the lifecycle, and nobody’s writing a £28,000 cheque at the end of a year-five wave.
That’s what the frame buys you: a hardware estate that’s predictable, in cash and in performance.
Where this lands with us
Hardware lifecycle planning sits inside our Managed Services practice. For managed clients we run the inventory, hold the refresh calendar, plan the procurement, and handle disposal, it rolls into the monthly service. For clients who’d rather drive it themselves, we’ll do the initial inventory and 36-month plan and check in annually.
Either way, the wave costs money you didn’t plan for, productivity you didn’t measure, and a Monday morning where three laptops fail at once and nobody has spares. A flat budget line is cheaper than that, every year, and the only question is when you start.
Trying to flatten a refresh wave that’s bunched into one year? Drop us a note at info@jmopartners.co.uk and we’ll do an initial timeline review.
Want the printable version of this checklist? Drop us a note at info@jmopartners.co.uk and we’ll send it through.
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