Let's start with desktop PCs because they're the cornerstone of office productivity and because its buying guidelines have broad applicability. You want to strike a balance between a PC's efficiency--that is, its ability to run current software at near-optimal levels--and the inevitable costs associated with shopping, buying and installing new hardware, training and supporting employees, wiping out the data and software from old hardware, then physically removing, storing and eventually disposing of it.
The good news on that front is that the life of the average midrange Windows desktop is getting much longer. This isn't about hardware reliability, which is already top-notch even among so-called white boxes, says Mark Margevicius, a Gartner senior research director.
You can also hold on to your desktop longer because its processing capabilities are staying one step ahead of the demands that are placed on them by popular software. And if you do it right, you can conceivably squeeze four years of life out of a 1GHz to 2GHz Pentium 4 or equivalent AMD processor (high-end Athlons or entry-level Athlon XPs). It sounds like a lot of computer, but Microsoft's new Windows XP needs at least a 500MHz processor and 128MB RAM if your PC is going to boot up the same day you turn it on. Even if you never install Windows XP, expect all other software developers to seize upon the XP footprint for their minimum desktop requirements--with the emphasis on "minimum."
Ultimately, you need room to grow, so it really won't pay in the long run to buy while you're one step behind the standard. Future software versions will end up bogging down your desktops, wasting worker time and forcing you to swallow the unpleasant costs of a premature upgrade.
How do we know? That's the way it's been for the past 20 years.