Product Lifetimes and Support for Software and Computers

By , July 26, 2010

I’ve been annoyed many times over the past 20 years when software and hardware makers renounce their own products, claiming that they are “no longer supported.”

Sometimes it’s designed to force customers to spend more money to buy upgrades, even if customers don’t need any new features.  However, there’s also a reasonable limit to how long a company can be expected to train its staff to work with customers using older software versions (often on antiquated computers and operating systems).

I understand the concept, and today I found an excellent “positive example” from the folks at WordPress: they announced that new versions of WordPress released after 2010 won’t work with older versions of PHP or MySQL. http://wordpress.org/news/2010/07/eol-for-php4-and-mysql4/

Of course, their announcement is entirely reasonable, in part because the changes don’t impose any financial burdens on anyone (all this software is completely free).  By requiring these newer versions of the software that WordPress relies upon, WordPress can provide better performance and more features without the cost of testing and adapting their code to work with older versions of those tools, and without the hassles of making certain features or capabilities available only to a subset of all users.

I’m more annoyed at companies like Microsoft and Dell, who proclaim that they won’t support products after a certain date.  I was especially upset at Dell, which essentially refused to provide support at any price for my Dell 5150/E510 computer, purchased in 2006, after the two-year warranty expired in 2008.  After re-installing the operating system due to a hard disk failure, I was unable to re-activate key features, including using the TV tuner card or DVR features. Dell flatly refused to provide support, even through its fee-based support programs.

Microsoft, to its credit, has sought to clearly define the “support lifetime” for each of its products, so that customers recognize that when they buy a computer or upgrade their operating system, they will cease to receive support from Microsoft (at any price) after about 5 to 7 years. (Of course, Microsoft itself won’t provide free technical support for its operating systems when pre-installed on computers.)

Recently, we bought a TiVo DVR and I was reminded of the absurdity of their “lifetime subscription option.”  You can choose to pay for the service monthly, annually, or with a one-time payment for a “lifetime subscription.” But although most consumers would expect that “lifetime” means “as long as the product works, including any hardware replacements under warranty,” TiVo’s definition is “whatever they may later choose to define as a product’s lifetime.” In other words, they might announce this autumn that the “lifetime” of the TiVo Series 2 (which I think has been available for almost a decade, though we only purchased ours last month) will end in 2011 or 2012, and then all those “lifetime subscriptions” will end.  And paying $300 for a “lifetime subscription” means nothing after the product’s hardware warranty expires (3 months standard, or 2 or 3 years with an extended service contract) — if the TiVo fails, your “lifetime subscription” ends, too.

For businesses, this represents a potential financial “trap,” especially if they operate their businesses using the standard depreciation periods imposed by the IRS (Publication 946, How to Depreciate Property), which assumes a 5-year depreciation period for “Computers and peripheral equipment.”  In fact, many computers and most peripherals will not remain in use for 5 years.  Your accountant can advise you on how to deal with this in your tax accounting, but from a business planning point of view, you should budget to replace most peripherals within 3 years, and to replace or upgrade most computers every 2 to 3 years.  In most cases, computer software will require expensive upgrades every 1 to 2 years.

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