Organizations often find it hard to justify the cost and business disruption of replacing IT equipment according to manufacturers’ recommended refresh cycles. An alternative is to purchase maintenance agreements that ensure rapid support in the event of equipment failure.
But which maintenance agreement should you choose? The support plans offered by original equipment manufacturers (OEM) tend to be expensive, with the price going up each year as equipment ages. What’s more, OEM agreements apply only to that manufacturer’s equipment, forcing organizations to manage and maintain a plethora of support contracts.
According to a 2019 Gartner report, maintenance agreements are increasingly considered a “nonstrategic” IT expense, with organizations looking for cheaper alternatives. Third-party maintenance is one option. The Gartner analysis found that third-party maintenance contracts can save more than 50 percent compared to OEM agreements — if the equipment to be covered is selected carefully.
It’s true that today’s sophisticated IT equipment has built-in redundancy that makes it more fault-tolerant than legacy gear. This reduces the need for costly annual maintenance contracts and support models with four-hour response SLAs. However, operating equipment without any support agreement is a risky approach that can result in extended downtime and high, unexpected costs.
Significant Savings
The pay-per-incident support model offers a cost-effective alternative. Organizations pay a minimal subscription fee for guaranteed next-business-day SLAs for most equipment. A slightly higher fee provides 24x7 four-hour response for mission-critical systems. When support is needed, the subscriber pays for the service and parts, with expenses capped at a not-to-exceed maximum amount.
The savings can be substantial. An organization with 1,300 covered systems might pay $325,000 a year for a traditional third-party maintenance contract. The organization might have 130 support calls during the term of that agreement, 15 of which require parts and labor with the other 115 requiring only parts. That’s $2,500 per support call regardless of the extent of the problem.
That same organization would pay just $105,000 for a pay-per-incident subscription. The 15 support calls requiring parts and labor would cost $30,000 ($2,000 per incident) and the 115 requiring only parts would cost $10,000 (less than $90 per incident). The total annual cost would be just $145,000 — 45 percent of the traditional third-party maintenance plan.
No Comprise in Quality
The cost savings does not come at any sacrifice of quality or responsiveness. Experienced engineers and technicians with expertise in a wide range of data center equipment can quickly troubleshoot issues and determine if service is required or parts replacement will fix the problem. Best-in-class pay-per-incident solutions provide top-quality OEM hardware and services to enterprises around the world.
The SirviS Maintenance Defined (MD) program is an innovative pay-per-incident solution that significantly reduces opex spending on support services. Our transparent, guaranteed ROI model provides savings of up to 75 percent compared to conventional support contracts, with support delivered by our team of industry veterans with decades of real-world experience.
More and more organizations are recognizing that traditional OEM support plans are expensive and inflexible. Third-party maintenance is less expensive but still overkill for most modern, fault-tolerant equipment. Pay-per-incident support models provide significant savings with guaranteed SLAs to meet enterprise requirements.
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