Computers are like cars – right?

A meeting with Phil – the procurement manager

“The residual values in your computer leases are pathetic. It’s an awful indictment of your lack of faith in your own products when you’re prepared to put no more than a 10 per cent residual value into a three-year lease. In the motor trade you’d get at least double that.’

The salesman replied:-

‘Phil, the similarities between mass-produced cars and computers only go so far. The speed of technical innovation in computer manufacturing is far quicker. For example, a newly launched computer may not be fit for purpose within four or five years of its first shipment. After this time it is still reliable and it still performs at its design speed but the IT environment will have moved on. New software and applications require ever more powerful processors and the original computer has to be replaced. It will have minimal second-hand value because no one will want to buy it. However, a five-year-old family saloon can still do the job at acceptable levels of speed, comfort, reliability and safety. A Formula 1 racing car provides a better comparison to the IT environment. A five-year-old racing car may still achieve the speed it was designed to do but it won’t win any races because more recently built cars go faster.’

‘Listen. I’ve been around the track so many times that it makes me dizzy just to think of it. There’s nothing you can tell me about racing cars. Anyway, there’s still a good market value in old Formula 1 racing cars.’

‘But it’s nothing compared to the cost of the original build. Formula 1’s are not mass produced. They are collectors’ items. You won’t find many vintage enthusiasts polishing a 20 year-old computer every Sunday morning in their garage before they take it for a sentimental batch run.’

This is an edited extract from the book – London Irish Dublin English, available on Amazon.