Are you facing hardware delays due to the global chip shortage?

Park Place Hardware Maintenance

Parker April 27, 2021

Sourcing available parts within your data center remains as challenging in 2021 as it did in 2020. Servers, networking and storage hardware procurements continue to show high demand levels and a fragile supply chain.

While production coming out of Asia is no longer disrupted to the point at the pandemic outset when hardware manufacturers were forced to shut factories, specific IT devices and components remain stubbornly hard to source or display increasingly long manufacturer lead times.

Factors Behind the Global Chip Shortage

Behind these hardware shortages sits a heavily disrupted semiconductor chip supply chain where quite simply, demand is far outstripping supply. These chips power everything from massive data centers to cars to hand-held devices, and our new ways of working through and post-Covid has created a perfect storm of consumption demand – both as consumers and as businesses. The ferocity of the storm has been heightened further in recent months with reports of widespread chip stockpiling ahead of likely sanctions alongside delays on increasing capacity at existing chip plants.

Collectively, the impact has seen a surge in global chip prices and an extension of wait times. The Semiconductor Industry Association notes that although the big semiconductor companies are now investing huge sums to boost capacity – alongside some government initiatives in countries like the US to increase domestic production – recovery and stabilization of chip supply could take up to three years. This outlook is, of course, extremely limiting for businesses needing essential hardware refreshes, some of whom may have already postponed upgrades within lockdowns and who are now forced to consider other avenues to bolster the IT supply chain.

Solutions to the Chip Shortage

In this timeframe, critical hardware is very likely reaching its end-of-support date with no replacements readily available, or even a solid replacement schedule to band-aid towards.

IT managers are increasingly deploying contingency plans both for finding and maintaining essential data center and networking infrastructure assets, turning towards reputable, global Third Party Maintenance providers (TPMs) to overcome IT supply chain issues with readily available, fully stocked, generation -1 (and beyond), certified IT hardware.

1. Third Party Maintenance Companies

But not all TPMs are created equal so selecting the right one to help overcome your procurement challenges is essential. This is where the size of the TPM really does have an impact in helping reinforce your IT infrastructure supply. You will need to find a provider that can prove asset inventory and stocks across tens of thousands of items and ideally from within the same geo to avoid shipping delays, taxes and customs issues.

Your selected TPM will also need to have localized engineering teams to support you through the install if it is a complex item that you are waiting for. Or, if it is a simple plug and play that your team can install internally, the TPM will need to be able to offer the reassurance that every single asset has been pre-tested before it leaves their facilities for immediate and full usage. Dead on Arrival (DOA) should be an issue of the past. It also worth asking in the current recovery climate if the TPM you engage with can offer flexible contracts and shorter maintenance periods that span not for years, but flexibly from 3 to 6 months until your OEM equipment finally lands. Of course, up front, you should request an inspection of the TPMs certifications and process adherence to ISO standards.

Alternatively, while you wait for new hardware, you can continue to stretch your installed assets even when they fall outside of manufacturer End of Life dates, using a reputable TPM to readily pick up on the maintenance. This will allow you to keep running without disruption. Often usage of TPM contracts offer greatly reduced maintenance bills compared with the OEM support options and are backed with incredible service levels with 24/7 support from experienced, vendor-accredited L3 engineers.

At Park Place Technologies we serve over 20,000 customers globally with millions of assets under our care and procurement, hence we continue to offer an unsurpassed worldwide stock inventory even in drought chip conditions. For over a year now we have been advising prospective customers to create a checklist as part of their virus response planning that will quickly help them combat IT delays by identifying and contacting TPMs who can offer:

  • A global presence with multiple offices, countries, locations
  • An extensive parts catalog across multiple vendors for servers, storage and networking
  • Certified, tested, ready-to-go hardware
  • An option to source and procure IT components in the second-hand market
  • Flexible contracts that can change when the supply chain moves
  • An outstanding engineering presence both onsite and remote support
  • A demonstrable ROI for the period of the contract that far surpasses your OEM support agreement

And while you may venture into a TPM relationship as an assured band-aid for the short-term, likely the removal of managing an inventory of spare parts, and the hassle of sourcing new assets will tempt you to stay within the TPM’s umbrella coverage, even when the taps for chip supply open fully back up again.

2. IT Hardware Resellers

Speaking of staying within the TPM’s umbrella coverage, many third party maintenance companies own or cooperate with IT hardware resellers.

Delays in OEM hardware deliveries of 3-9 months have become common due to persistent component shortages and supply chain struggles. In contrast, many of the most in-demand current- and previous-generation networking equipment is available on the secondary market for real-time delivery.

Curvature, a Park Place Technologies company, hasn’t experienced the shortage by which the primary market is being rocked. Many of the latest devices are dependent on the new chips that are currently in short demand caused by the combination of factory shutdowns from the pandemic; significant production disruption at production facilities; some evidence of components stockpiling, and most importantly, increased domestic and commercial demand throughout Covid-19. When you buy used network equipment or data center hardware, you can surpass the supply chain issues. Curvature stock remains steady.

About the Author

Parker, Park Place Assistant