High-Priced High Tech

In 1965, Intel cofounder Gordon Moore observedthat the numberof transistors per square inch had doubled every year since the integrated circuit was invented. He correctly predicted that this trend would continue, and, although the pace has slowed somewhat, the doubling of data roughly every 18 months has become known as Moore's Law. One corollary to this principle is that as hardware capacity increases, software becomes more complex.

The consequences for the typical remodeling company owner seem to follow a related set of rules. One rule is that as electronic gadgets proliferate, they tend to become integrated into a business's everyday routine. Another is that as the price of hardware goes down, the cost of maintaining it goes up proportionately, and the cost of acquiring and learning software goes up exponentially.

Hardware includes computers, printers, scanners, fax machines, and digital cameras. Most companies upgrade computers every other year; in a large network, that means replacing several machines each year. These costs also include regular supplies, such as printer cartridges, flash memory cards for cameras, and the like, plus any insurance and extended warranties.

Software includes new purchases as well as upgrades, plus subscriptions, such as quarterly estimating upgrades, anti-virus and anti-spam subscriptions, and annual payroll or tax packages.

Tech support is outsourced in all but the most basic of systems. It includes services to set up, troubleshoot, and repair hardware and software problems, and often includes online backup. A basic system may require seven to 10 hours of tech support annually; but costs to maintain networks increase exponentially with the number of work stations.

Web design and hosting are often broken out separately — in the marketing budget, for example — as are the cost of cell phones and service. However you account for them, these expenses are an integral part of any company's technology package and qualify to count as technology costs.

The proof is self-evident. Just 10 years ago, computerizing your remodeling company was optional; today, it's essential. In 1995, a state-of-the-art desktop computer cost about $2,500. The average remodeler bought just one and used it for five years before upgrading. Today, a desktop system that's 100 times more powerful can be had for about $500. But staying current with a state-of-the-art notebook will still cost you at least $2,500.

What's more, because processor speed, memory chips, and mass storage is advancing so rapidly — Moore's Law at work —you'll likely replace your notebook with a newer model every two years or so. And with every leap in hardware capacity, you'll need to upgrade your software.

Office technology has become a major line item expense for most remodelers (see chart, left), but the cost of hardware is the least of it. The bulk of the cost goes to software subscriptions and upgrades and tech support. Older computer systems were difficult enough for the average person to decipher, but today's machines are ‘black boxes” that only a true gearhead can fathom. Despite the promise of plug-and-play hardware and software, when something goes wrong, it's Geeks On Call to the rescue.

Thanks to Hilton Enterprises (Stillwell, Kan.), Mark IV Builders (Bethesda, Md.), Winans Construction (Oakland, Calif.), and Mc-Cutcheon Construction (Berkeley, Calif.) for help with this article.