Third-party maintenance explored

As global spending on data center technology eclipses the $200 billion mark, choosing the right IT hardware maintenance solution is more important than ever before. Much to the chagrin of many IT Professionals, the high costs and limited service-level flexibility of traditional maintenance solutions put businesses on a tightrope trying to balance the costs of hardware maintenance and the health of their IT hardware.

Prominent research firms such as Gartner and Forrester have pointed businesses towards third-party maintenance (TPM) as an excellent alternative to OEM maintenance. In fact, Gartner states that it "has seen very few customers look to move equipment back to OEM maintenance once it has been moved to a TPM because overall satisfaction with TPMs is good and the savings are dramatic."1 TPM has gained significant traction over the years, for the following reasons:

Cost optimization

While IT maintenance is essential to keeping the data center up and running, maintenance costs often make up a considerable chunk of IT spending. According to Gartner, maintenance costs take up 15 to 25% of total enterprise IT budgets annually and network managers are focused on reducing and controlling these expenses.2 With a substantial amount of the spending tied to maintenance costs, it limits the amount that businesses can invest in other IT spending priorities such as hardware upgrades, cybersecurity enhancement and hybrid cloud migration.

A key factor behind higher IT maintenance costs is the premium pricing of OEM maintenance, which is cost-prohibitive especially in comparison with TPM. According to Gartner, TPM contracts can offer customers 50 to 70% savings off OEM support net prices.3 With these savings, businesses can allocate more spending to other IT spending priorities.

Extended product life cycles

Another major concern for businesses when it comes to IT spending is the duration of hardware product life cycles. Generation by generation, businesses invest a great deal of money in upgrading hardware to meet the latest computing demands. Extending the product life cycles of the IT infrastructure is a key priority for these businesses.

However, OEMs often do not provide hardware support for EOL (end-of-life), and EOSL (end-of-service-life) products, effectively shortening hardware life cycles. EOL products, which are no longer sold and marketed, and EOSL products, which no longer receive product support, are both designated by the OEM. Because OEM business models are constantly developing and looking to sell new equipment, prolonging the life cycles of their products could eat into the demand for newer versions of their products. This makes them less inclined to provide EOL and EOSL support, as they are looking to phase out products faster, sometimes even before the product has reached its MTBF (mean time before failure). Many OEMs also charge a premium for post-warranty pricing. As Gartner reports, customers will often switch to TPMs when the original warranty runs out, rather than renew the OEM support contract, at significantly higher OEM post-warranty pricing.4

Without EOL, EOSL and affordable post-warranty support, OEM hardware is left unprotected and vulnerable to hardware degradation. This increases the risk of hardware failure, putting businesses in a precarious position with their unprotected IT infrastructures. This is the key motivation for users transitioning towards TPM. According to Gartner, end-user customers are selectively using TPMs to cost-effectively extend the life of IT assets, manage or delay OEM-forced upgrades and save money.5

Customer-oriented approach

IT infrastructures typically consist of hardware from a variety of OEM vendors. As Accenture states, "Although these large hardware providers are ideally suited to provide support for their own hardware, the reality is that most companies have a diverse mix of gear (i.e., servers from one vendor, storage gear from another, networking gear from a third) not to mention a mosaic of data center software."6 With the OEM prioritizing the development of their products, it can be challenging for them to provide support for the customer’s entire collection of hardware. TPM provides consolidated vendor management to protect all of the customer’s hardware, regardless of the original vendor.

OEM service contracts generally offer limited-service flexibility with service levels that may not be in line with the needs of your business. OEMs are also reluctant to customize contracts with timelines better suited for customers. Gartner states that a number of OEMs will typically not entertain a contract of less than a full year. A TPM, on the other hand, is typically willing to provide a customer a short-term contract such as a contract of nine months or less.7

Enter Axiom Maintenance Services (AMS)

With the right TPM solution, such as Axiom Maintenance Services, organizations can drastically cut down IT maintenance costs and utilize the benefits of OEM-equivalent or superior maintenance service quality. AMS prioritizes the long-term health and development of your IT infrastructure, so that every cent that would otherwise be spent on more expensive maintenance costs, can be invested in protecting and upgrading IT infrastructures instead.

AMS also maximizes the product life cycles of IT hardware, offering extended warranties and technical support for EOL, EOSL, and post-warranty hardware. With this class of support for newer and legacy infrastructures, IT users are able to run any functional hardware and dictate the pace at which they upgrade their IT infrastructures.

AMS delivers best-in-class technical support with maintenance contracts for server, network and storage equipment from all major OEM brands and third-party vendors. It can also be utilized in tandem with OEM maintenance, as well as a spares program to create a hybrid approach that best serves unique business needs. Axiom’s TPM solution addresses the diverse needs of customers, offering more flexible contracts and a diverse range of service tier levels such as 24x7x4, 8x5xNBD or even custom service levels.

With 25 years of experience in the IT hardware and maintenance industry, Axiom understands what works best for your business.

Learn more about Axiom Maintenance Services, and contact our team today to get a free quote.

References
1 "Market Guide for Data Center and Network Third-Party Hardware Maintenance," Gartner, accessed January 20th, 2021, https://www.gartner.com/en/documents/3956803/market-guide-for-data-center-and-network-third-party-har
2 "How to Reduce Network Equipment Maintenance Costs," Gartner, accessed January 22st, 2021, https://www.gartner.com/en/documents/2738018/how-to-reduce-network-equipment-maintenance-costs
3 "Market Guide for Data Center and Network Third-Party Hardware Maintenance," Gartner, accessed January 20th, 2021, https://www.gartner.com/en/documents/3956803/market-guide-for-data-center-and-network-third-party-har
4 "Competitive Landscape: Leveraging Third-Party Maintenance Providers for Data Center and Network Maintenance Cost Optimization, North America," Gartner, accessed January 20th, 2021, https://www.gartner.com/en/documents/3256617/competitive-landscape-leveraging-third-party-maintenance
5 "Market Guide for Data Center and Network Third-Party Hardware Maintenance," Gartner, accessed January 20th, 2021, https://www.gartner.com/en/documents/3956803/market-guide-for-data-center-and-network-third-party-har
6 "Accenture Spend Trends Report Q3 2014," Accenture, accessed January 22th, 2021 https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/LandingPage/Documents/Local/1/Accenture-Spend-Trends-Report-Q3-2014.pdf
7 "Market Guide for Data Center and Network Third-Party Hardware Maintenance," Gartner, accessed January 20th, 2021, https://www.gartner.com/en/documents/3956803/market-guide-for-data-center-and-network-third-party-har

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