OEMs and Tech Refreshes: Why They Do It—and What It Means for You

While these refreshes often bring technical advantages and improved efficiencies, they also raise questions for IT leaders and end users about cost, sustainability, compatibility, and long-term value. This article explores why OEMs are so invested in tech refreshes, how these refreshes impact users, and what businesses should consider when faced with them.

How OEMs Drive Tech Refreshes

1. Innovation as a Competitive Weapon

At the core of the tech refresh cycle is innovation. OEMs allocate substantial resources to research and development (R&D) to introduce new features and technologies that enhance product performance, user experience, and integration with emerging standards.

For instance, in 2023, Intel launched its 4th Gen Xeon Scalable processors with built-in AI acceleration and security features—advancements that require new server motherboards and memory architectures. Similarly, Cisco regularly updates its switching and routing platforms to support next-generation protocols, automation capabilities, and enhanced security. These continual innovations compel enterprises to refresh their infrastructure to remain compatible, efficient, and secure.

According to McKinsey & Company, companies that lead in digital innovation outperform peers by up to 2x in terms of shareholder returns over the long term.

2. Planned Obsolescence and Product Lifecycle Management

Though rarely discussed openly, OEMs often incorporate product life cycles into their go-to-market strategies. Devices are typically sold with a defined End-of-Life (EOL) or End-of-Service-Life (EOSL) timeline. Once reached, OEMs stop offering software updates, spare parts, and technical support, making continued operation of that hardware risky or inefficient.

This encourages organizations to migrate to newer systems. A common example is seen in the enterprise server space: Dell EMC, HPE, and Lenovo all operate lifecycle programs where support phases out after five to seven years. When equipment reaches EOSL, customers are nudged—if not compelled—to replace it.

This tactic is particularly visible in industries like healthcare, telecommunications, and banking, where system uptime and security are critical, and continued vendor support is non-negotiable.

3. Accelerated Technological Advancement

The pace tech evolution is another major driver. Advancements in semiconductor technology, memory architecture (e.g., DDR5 RAM), network bandwidth (like 800Gbps transceivers), and storage protocols (e.g., NVMe over Fabrics) all necessitate regular hardware refreshes to capitalize on these developments.

Additionally, OEMs frequently introduce power-efficient architectures, AI/ML accelerators, and modular form factors that make legacy systems obsolete. Nvidia’s release of GPU platforms specifically designed for AI inference and training tasks, for example, has triggered widespread data center refreshes in both hyperscale and enterprise environments.

4. Modular Platforms and Common Architectures

In the automotive industry, for instance, Volkswagen’s MQB and MEB platforms or XPeng’s SEPA 2.0 Fuyao architecture illustrate how modular engineering enables rapid deployment of refreshed models with shared components. This concept is extending into IT hardware: Cisco's Unified Computing System (UCS) and Dell’s PowerEdge servers use modular backplanes and chassis, allowing customers to refresh components selectively rather than replacing the entire system.

This flexibility encourages OEMs to push incremental refreshes, maintaining customer engagement while reducing the total cost of upgrades.

5. Market Trends and Consumer Demand

OEMs closely monitor macro trends such as AI adoption, cybersecurity risks, and hybrid cloud strategies. For example, the shift to AI-enabled PCs (e.g., Microsoft's Copilot+ initiative) and secure-by-design IoT systems pushes vendors to launch hardware tailored for those needs.

Similarly, with the rising adoption of hybrid work and edge computing, OEMs have responded by refreshing products with remote management capabilities and smaller footprints to support distributed IT environments.

6. Software-Defined Everything (SDx)

As products become increasingly software-defined—such as software-defined networking (SDN), storage, or vehicles—OEMs must also update the hardware that enables those software features. In automotive, Tesla’s Full Self-Driving (FSD) software requires new chipsets and sensors. In enterprise IT, VMware’s latest hyperconverged infrastructure solutions require compatible CPU and memory configurations, effectively forcing hardware refreshes.

The Business Benefits of Tech Refreshes (For OEMs)

1. Revenue Growth and Recurring Sales

Tech refresh cycles create recurring revenue opportunities. According to Gartner, the global data center infrastructure market is expected to reach $200 billion in 2025, much of it driven by hardware refreshes and cloud repatriation efforts.

OEMs rely on refresh cycles not only for hardware sales but also for upselling services, software licenses, and support contracts. This recurring sales stabilizes revenue forecasts and strengthens their investor narrative.

2. Brand Strength and Market Positioning

Companies that are perceived as innovation leaders—like Apple, Cisco, and Nvidia—are often those that refresh their product lines regularly with new technologies. This fosters brand loyalty and positions the OEM as a thought leader, giving them a marketing edge in crowded markets.

3. Performance and Security Enhancements

Refreshed hardware offers improved throughput, lower latency, and reduced power consumption. It also integrates the latest security features such as hardware root-of-trust, secure boot, and AI-based threat detection. For example, AMD’s EPYC server processors now include embedded security processors to guard against firmware-based attacks—a capability not found in older chips.

4. Lower Long-Term Maintenance Costs

As older systems degrade, their maintenance costs rise. Parts become scarce, support hours increase, and system performance declines. OEMs argue that refreshing infrastructure lowers total cost of ownership (TCO) by improving energy efficiency and reducing downtime.

Challenges Tech Refreshes Pose—To OEMs and Customers Alike

1. High Research & Development (R&D) Costs

Innovation isn’t cheap. Developing new chipsets, testing compatibility, and passing regulatory certifications can consume billions. Intel, for example, spent $15.2 billion on R&D in 2023 alone. OEMs must balance the frequency of refreshes with the financial strain of constant innovation.

2. Supply Chain Complexity

Global supply chains have become more volatile, particularly post-pandemic. OEMs that rely on multi-tier suppliers—often spread across continents—face logistics, geopolitical, and regulatory hurdles when launching new products. The 2021 semiconductor shortage is a prime example of how disruptions can derail refresh plans across industries.

3. Cost vs. Innovation Trade-offs

OEMs must carefully calibrate product pricing with the level of innovation offered. Overpriced refreshes may drive customers to delay purchases or explore alternative vendors—including the preowned hardware market, which is growing rapidly.

4. Customer Hesitancy and Adoption Barriers

Many businesses, especially small and mid-sized enterprises (SMEs), are reluctant to refresh functional hardware unless there's a compelling ROI. This creates friction in the OEM’s sales cycle. Moreover, the perceived value of new features must be effectively communicated; otherwise, they risk being seen as incremental rather than transformational.

5. Legacy Compatibility

Integrating new systems into environments that include legacy applications or infrastructure can be complex. This is especially true in sectors like government, industrial automation, and finance, where older systems remain mission-critical.

6. Environmental Concerns

The refresh cycle contributes to the rising issue of electronic waste (e-waste). According to the Global E-waste Monitor, over 53.6 million metric tonnes of e-waste were generated in 2019, and this number is expected to increase by 30% by 2030.

OEMs are under growing pressure to implement sustainable design, recycling programs, and circular economy practices. Some OEMs now offer “take-back” services or promote refurbished product lines to help address these concerns.

What Does This Mean for IT Leaders and Organizations?

1. Don’t Automatically Follow the OEM Refresh Calendar

IT leaders should assess the true need for a tech refresh by considering current system performance, compatibility, security requirements, and total cost of ownership. A product reaching EOSL doesn’t necessarily mean it must be replaced immediately—third-party maintenance (TPM) and refurbished hardware options may still meet operational needs.

2. Evaluate Refresh ROI Based on Business Outcomes

A refresh should be justifiable in terms of improved productivity, energy efficiency, security posture, or regulatory compliance. For example, migrating to a new storage array might make sense if it enables real-time analytics or reduces power consumption significantly—not because a vendor declared the old one obsolete.

3. Consider Hybrid Procurement Strategies

More organizations are now combining OEM-backed new equipment with certified refurbished gear. This blended approach allows them to optimize performance in critical areas while minimizing spend in non-critical workloads.

4. Prioritize Sustainability

Avoid discarding functional systems. Many OEMs now offer trade-in credits or remarketing programs. Alternatively, working with IT asset disposition (ITAD) providers ensures that outdated hardware is responsibly recycled or repurposed.

5. Push Back and Ask Questions

When faced with pressure from OEM sales teams, IT teams should ask:

● What tangible business benefits does this refresh bring?

● What other customers face same/similar problems as I am, that your proposed tech refresh has been able to resolve?

● Is my existing system truly incapable of supporting future workloads?

● What are the total costs, including software, migration, and downtime?

● Are there alternative ways (like a memory or SSD upgrade) to achieve similar gains?

Conclusion: Tech Refreshes as a Double-Edged Sword

For OEMs, tech refreshes are essential for growth, relevance, and innovation. For customers, however, they represent both opportunity and challenge. Refresh cycles can unlock performance, efficiency, and competitive advantage—but they also strain budgets, disrupt operations, and increase e-waste if not approached thoughtfully.

The key is to treat refreshes not as automatic decisions but as strategic evaluations grounded in ROI, lifecycle planning, and sustainability. By understanding OEM motives and aligning refresh decisions with business goals, IT leaders can navigate the refresh cycle on their own terms.

Discover what you can do in lieu of tech refreshes.