You business needs dictate which software you need to run. The software you run in turn determines the hardware you need. Don't buy hardware first and then decide what software you'll run later. Always decide on the software first, then get hardware that will handle that software. That way you get hardware that can handle your needs without spednign moer than you need.

There are many reasons to upgrade your PC or server, but here are the 3 fundamental reasons.

1 - Application Software
If you need to run newer application software, whether it's your business application software, your financial and accounting software, or even your word processing and spreadsheet software, often the newer versions require a faster computer or server, either for capacity or for performance. Often there will be new features that the new version of the software will offer that you will want to take advantage of, but that new software version may not run as well, or at all, on your old computer or server. Often software companies will stop supporting older versions of their software, which means you'll have to upgrade in order to get help when you need it.

2 - WIndows Software
Just like application software, Microsoft comes out with new versions of their Windows software. Windows 95, Windows 98, Windows 2000, Windows XP for the PC and Windows NT Server, Windows 2000 Server, Windows 2003 Server for servers and they also will discontinue support of older versions.

3 - Expired Warrenty and Reliability
Usually the warrenty of your hardware will be expired after 3 years, and if you require a hardware support contract from the vendor (where they will respond within 4 hours to get the hardware fixed) you'll have to extend the warrenty which get's expensive the older the equipment is.

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