### Introduction

Throwing hard-earned cash down for computer purchases is never an easy task. Computer hardware can be a particularly tricky purchase, considering the sheer number of revisions, designs and price points at any one time. ATI and NVIDIA have over 100 cores combined for the AGP video market on shelves today. Yet, somewhere in that haystack of video cards lies the perfect video card, equally balanced in performance and price. Finding it can be a bit of a pain though. What we have decided to do today is step away from the specific type of guide format and look at buying components on a more general basis using mathematical modeling and historical data. We aren't going to tell you which hardware to buy per se, but we will show you the same methodology that we use when determining our picks for the week. We get really theoretical for the first few introductory pages before we get into the historical data, so bear with us if we sound like a college text book for a little while.

Let us cut right to the chase. When buying computer hardware – at least with a sane perspective – there exist only two goals in mind: minimize the Price and maximize the performance. Performance can be somewhat ambiguous, so in this analysis, we will refer to performance and features as Quality. We find later that Price and Quality are both predictable, yet dynamic equations, but the most basic building blocks of any economic model for computer hardware exist as Price (P) and Quality (Q).

It is actually very easy to put a data type on Price - it's just the dollar/yen/euro amount that the component costs. Quality, Q, is a little harder to quantify in the general sense. Everyone has different computing needs, and thus, it's virtually impossible for us to put a numerical value on the performance of a processor or video card in every application – but fortunately, we have benchmarks to simulate a vast majority of real world scenarios. The most critical and difficult step when computing your next purchase cost comes when we attempt to quantify Q. Don't let the name "quality" fool you either. CPUs, for example, make it easy for us to quantify Quality in specific applications because one product is always arbitrarily faster than another. Video cards, on the other hand, make it a little harder, since we need to put a value on additional features like TV tuning or Image Quality. We will get more into these concepts on the following pages.

#### When to Upgrade?

The million dollar question that we get asked every day, thousands of times a day is "When should I upgrade?" Actually, the questions are usually phrased like:
• "Should I wait six weeks to buy a Radeon X800 XL?"
• "Is it worth it for me to upgrade to an SLI motherboard?"
• "Should I buy more RAM?"

Finding the right time to upgrade shouldn't revolve around the next best thing or even a particular component. The right time to upgrade can usually be modeled around how Valuable additional Quality is to you. The moment when you feel your Athlon XP 1700+ has put you behind a performance curve is the most opportune moment to start calculating how valuable an upgrade is to you. However, this can actually be quantified as well, and we will get more into that in the next couple of pages.

Another thing that we stress in our Buyer's Guides and Price Guides is to look at the entire picture when upgrading and not just a single component. You may feel that your Athlon XP 1700+ is too slow and that you need a new processor, but perhaps we can achieve better performance or Quality for cheaper by upgrading the video card instead. The solution actually hinges on looking at everything in the picture and not just individual components.

On the next few pages, we are going to determine the Value and Quality of some components and determine where the best upgrade path exists. This should answer the few example questions above, but the methodology can be applied anywhere we like when buying new computer hardware.

Quantifying Price
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• #### Poser - Sunday, January 30, 2005 - link

I've been thinking about upgrading my computer for the past 6 months or more. Gutting it, really, since once the motherboard goes, most of the other components will get upped too to prevent dumb bottlenecks -- I'm looking at around six to seven hundred dollars worth of upgrades. But, the thing that's held me back ISN'T waiting for the next big thing, or for prices to drop, it's that upgrading to Half-Life 2 or Doom 3 grade hardware is worth AT MOST \$150.

I love this site, I consider computer hardware to be a genuine hobby, but I can't justify to myself spending more than that on playing FPS video games. The price of a good PC gaming rig is so completely out of line with what it'd cost to just pick up an Xbox that I suspect I'll be sticking with strategy games for a very long time... that or buying a current or next gen console.

Eventually, I might find some "killer app" that is actually hardware-intensive (usably good speech recognition software with excellent OS integration?), but for the moment the only thing I do that challenges even my old 1400+ Athlon XP is gaming. I just can't bring myself to think that gaming on a PC is valuable enough to justify dropping the money.

This article was a cool read, because if nothing else, it made me think to put a number on how much I really would "value" or pay for better hardware.
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• #### Dragonbate - Sunday, January 30, 2005 - link

LOL I can't help but think this article was a farce. Reply
• #### cosmotic - Sunday, January 30, 2005 - link

Next time maybe you should tell us what we should do. Like "If this is your setup, the average person would upgrade HERE" and give what you would upgrade to. This is like trying to sell something to some one but then never actually asking them if they want to buy it. You have all these details and then no real conclusion. When SHOULD I upgrade? I have no idea, and it's not worth my time to read all this stuff and then figure it all out. Again, a nice conclusion with a concrete example would be nice. And some else that would be nice would be like arrows on the graphs that say "this is when you should upgrade and for reason X, Y, and Z". The graphs mean nothing without an explination or point. Reply
• #### Dranzerk - Sunday, January 30, 2005 - link

I think the single hardest part of a PC is upgrading. If we did not have PC games how many here would be running the latest hardware? I would upgrade once every 2 years, instead of buying new hardware little at a time every month to make a new pc every 6 months. lol

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• #### gaidin123 - Sunday, January 30, 2005 - link

Great article! Granted most people won't actually do the formulas but this is a great article to link to when people moan about waiting for the next big thing. ;)

Of course if you *need* the next big thing for the purpose you will use the computer for (ie SATAII or 802.11n) you have to wait...

Gaidin
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• #### archcommus87 - Sunday, January 30, 2005 - link

But how is this reliable? The quality percentages are for one application only and even then are very estimated. And the cost per day of one quarter of NOT upgrading can vary greatly. If I'm gaming fine just now I'm not losing out on anything by not upgrading yet. Reply
• #### MarkM - Sunday, January 30, 2005 - link

Also, I think I might add, this is a hobby for most people, not a business. The whole point is to have fun, and sometimes the excitement of researching the new hardware is the best part. A cost/benefit analysis reduces the biggest benefit for some, the fun. Reply
• #### MarkM - Sunday, January 30, 2005 - link

Uhh ... that was interesting. Man, I'm an ANALYST for my career, I write cost/benefit analyses all the time, and even I was skimming by the last few pages of that!

The one variable you didn't figure in (I think?) was the evaluator's time. Spending hours of your time calculating whehter it's workth it to spend the extra \$50 may not be cost effective, in the gneral sense of resource cost. One thing I learned very early in my career is that there is a cost/beniefit ratio even in preparing the cost/benefit. If it is a relatively minor outlay, you need to apply heuristics over full blown analysis.

Still, I think this is perhaps a good intro to peopel not used to thinking in this way.
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• #### deathwalker - Sunday, January 30, 2005 - link

Ah...the benifits of being an impulse buyer. I don't have to worry about stuff like this. If you want it...get it...trash the formulas. Reply