Strategic IT equipment replacement considering EOS and risk of failure

IT equipments have generally opportunities to be repaired within a given maintenance service period. And IT equipments have many risks both in software and hardware aspects after the service is expired (called End of Service), even if it can be used more. It makes us realize that one of the fundamental characteristics of the IT equipments is to have economical use according to the maintenance service. It should therefore be managed life cycle from a point of view of economical use and replacement; renewal of a service contract or migrating to new equipments smoothly. This paper aims at efficient replacement management for the IT equipments based on economic life and risk of failure which are widely used in engineering economy. Specially, the simple procedure to decide migrating to a new equipment or renewal of the service contract is proposed. This enables us to decide the optimal replacement time under equipment failure uncertainty as a risk.