You can add a 128Mb stick to a box for < 75 USD right now.(Granted, once you factor in overhead in including purchasing and labor, it costs an organization more this.)

dws++ for bringing up the issue of adding hardware (there are many ways of making code fast enough, one of which is throwing Moore's Law at the problem), but if this code's running on a production machine, the cost of adding hardware may be astronomically higher than $75USD once you factor in the cost of downtime. If you don't have a hot failover box, you'll have to shut down the machine for at least a couple of minutes, and in my experience this sort of trivial upgrade ("we're just adding another stick of RAM, what could go wrong?") is exactly the kind of thing that ends up lasting for hours and generating infinite Angry Customer Calls. If that $75 stick of RAM ends up losing you a $100,000 contract, you might have been better off paying a programmer to spend a day profiling, optimizing, and documenting the code.

I realize that your response was much more sophisticated than just "hardware's cheap, throw hardware at it", but not all costs are obvious, and it's often a mistake to look only at first-order costs. (This happens with a lot of hardware purchases: buying that cheap KVM switch costs you a lot of money when it dies just before a major outage, for instance.)

That said, if you're running into hardware walls like this on a regular basis, it's probably time to upgrade somewhere in the near future -- like your next maintenance window.

(And without bringing in a straw-man argument, let me just mention that there are some places -- hospitals, for instance -- where downtime costs more than just money.)

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The hell with paco, vote for Erudil!