Third Party Maintenance is Gaining Ground—Here’s Why
Park Place: Hardware Maintenance
Third party maintenance is making inroads in corporate IT and having an impact on hardware refresh rates. Although the move to on-demand cloud services is more often covered in relation to hardware sales, Forbes is among the outlets talking about CIOs’ new attitude toward enterprise systems:
The market for business hardware isn’t what it used to be. Corporations are no longer buying as many servers, personal computers, storage appliances, and printers. Many are choosing to buy computing services from giants like Amazon that they don’t have to maintain. If they do chose to buy, companies tend to wait longer to replace their equipment. As a result, business spending on hardware is expected to drop 13.6% to $2.98 billion in 2017, compared with $3.4 billion in 2014. [Emphasis added]
It is unclear how much extended hardware lifespan is contributing to the 13.6% drop in hardware sales, but it could represent a $100 million or more. While that is bad news for companies like HP and the forthcoming Dell-EMC entity, it’s great news for IT budgets because it represents significant CAPEX savings.
Third party maintenance is enabling this trend because alternative providers will support hardware longer than the OEMs and at a more affordable price. This makes it possible to keep hardware for seven to ten years or more—without paying a fortune for extended support, being abandoned after an OEM end-of-support-life date, or adding risk to the IT operation by using hardware without a maintenance contract.
Here’s why we believe this approach has finally caught on.
It’s the Savings, Stupid
In presidential elections, James Carville’s coined phrase about the economy holds true—it’s the issue most likely to motivate voters. For third party maintenance, a search for cost-savings often instigates a provider switch. When customers find out they can slash 40% to 70% off the cost of support contracts, they simply have to take a look at third party maintenance.
It’s Really Not Risky
For a long time, some CIOs shied away from third party maintenance because of quality concerns. Although the OPEX savings were attractive, they worried that increased downtime and other problems would eat up those gains and then some.
To protect their profits, OEMs also told cautionary tales about what could happen if enterprises left their protective fold.
As the alternative support market has grown, however, premium-quality providers have come garnered attention. These companies meet or beat OEM SLAs, engineering expertise, and overall quality, ensuring that system performance and reliability are not affected by a move away from the OEM.
As more and more companies have tried out the service starting with a few pieces of legacy gear and have seen the benefits, word has spread and the race to third party maintenance has accelerated.
The Extras Are Impressive
The final nails in the OEM support coffin are the packages some third party maintenance providers have put together. Whereas OEM support is usually limited by fine print about severity levels and excluded services, a few alternative providers are offering responsive, full-service support while still delivering savings.
incorporates more features in a basic contract than most support companies will supply at a premium level. Among the most popular inclusions are:
- Immediate access to Level 3 support with no escalation procedure or severity level-based wait times for assistance
- A local, Level 3 account engineer to provide more personalized and efficient service from an expert who already knows the environment
- Full component coverage, as well as software and firmware support included, so no troubleshooting process is accompanied by unexpected costs
- Remote monitoring, preventative maintenance, and extra engineering time clients can allocate for whatever non-break/fix issues they see fit
This may be the greatest surprise about third party maintenance—it can actually improve a data center environment. We often see enterprise clients choose third party maintenance for a few pieces of legacy equipment the OEM no longer supports or charges too much to maintain. Once these IT organizations experience the benefits, however, they soon expand their agreements to cover a full complement of systems because the financials make sense.