We should develop on slow boxen because it forces us to optimize early.
Randall Hyde points out in The Fallacy of Premature Optimization, there are plenty of misconceptions around the Hoare quote:
We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil.
In particular, even though machines these days scream compared with those in Hoare's day, it doesn't mean "optimization should be avoided." So does my respected colleague have a point when he suggests that we should develop on boxes of modest tempo? The idea is that performance bottlenecks are more irritating on a slow box and so they are likely to receive attention.
What is premature optimization? Premature optimization is spending a lot of time on something that you may not actually need. “Premature optimization is the root of all evil” is a famous saying among software developers. Its source is credited to Donald Knuth.
Premature optimization, at the microscopic level, is usually a bad idea. This does not suggest, however, that engineers should not be concerned about application performance. The fallacy that "premature optimization" is the same thing as "concern about performance" should not guide software development.
In summary, to avoid premature optimization, you should assess situations before deciding whether and how to optimize. In doing this, you should consider factors such as why you want to optimize, what are the costs and dangers of optimizing, and what else you could be doing.
This should be community wiki since it's pretty subjective and there's no "right" answer.
That said, you should develop on the fastest machine available to you. Yes, anything slower will introduce irritation and encourage you to fix the slowdowns, but only at a very high price:
Your productivity as a programmer is directly related to the number of things you can hold in your head, and anything which slows down your process or impedes you at all lengthens the amount of time you have to hold those ideas in short term-memory, making you more likely to forget them, and have to go re-learn them.
Waiting for a program to compile allows the stack of bugs, potential issues, and fixes to drop out of your head as you get distracted. Waiting for a dialog to load, or a query to finish interrupts you similarly.
Even if you ignore that effect, you've still got the truth of the later statement - early optimization will leave you chasing yourself round in circles, breaking code that already works, and guessing (with often poor accuracy) about where things might get bogged down. Design your code properly in the first place, and you can forget about optimization until it's had a chance to settle for a bit, at which point any necessary optimization will be obvious.
Slow computers are not going to help you find your performance problems.
If your test data is only a few hundred rows in a table your db will cache it all and you'll never find badly written queries or bad table/index design. If your server application is not multi-threaded server you will not find that out until you stress test it with 500 users. Or if the app bottlenecks on bandwidth.
Optimization is "A Good Thing" but as I say to new developers who have all sorts of ideas about how to do it better 'I don't care how quickly you give me the wrong answer'. Get it right first, then make it faster when you find a bottleneck. An experienced programmer is going to design and build it reasonably well to start with.
If performance is really critical (real time? millisecond-transactions?) then you need to design and implement a set of benchmarks and tools to scientifically prove to yourselves that your changes are making it faster. There are way too many variables out there that affect performance.
Plus there's the classic programmer excuse they will bring out - 'but it's running slow because we have deliberately picked slow computers, it will run much faster when we deploy it.'
If your colleague thinks its important give him a slow computer and put him in charge of 'performance' :-)
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