By John Donoghue, Senior Sales Executive, SSCS EMEA
If you’re responsible for hardware support contracts, or hardware OpEx reductions, but not yet familiar with the term, “hybrid hardware support,” let’s start with an explanation:
A “Hybrid Hardware Support” model describes when your in-warranty IT hardware (servers, storage and networking) are supported by the OEM, during the warranty period. Then, all or a portion of your post-warranty assets are maintained by an independent hardware support provider (also known as Third-Party Maintainer). This hybrid support model is strategically chosen to impact and reduce OpEx (Operational Expenses).
Top Three Reasons Companies Adopt Hybrid Hardware Support:
1. Significant OpEx reductions are very possible, freeing up funds for more critical initiatives. Click Here to read more.
2. Companies wish to have greater leverage against OEM tech refresh strategies or are already extending hardware lifecycles (especially in storage) thereby optimizing CapEx budgets. Click Here to read more.
3. According to Gartner, 71% of the world’s largest companies have already adopted a Hybrid Hardware Support Model to reduce OpEx, using funds saved for other initiatives. Now, more and more companies are exploring the best practices chosen by their larger peers. Click Here to read more.
Why Shouldn’t Independent Hardware Support be Commoditized by “Price-Only Focus?”
If a hybrid support model is a logical means to drive down total OpEx spend, why is it unwise to enable your IT Procurement teams to choose solely on lowest price?
About 10 years ago, and before the marketplace accepted the validity/credibility of independent hardware support, data centre operations teams often collaborated with IT procurement to vet hardware support vendors. The data centre operations teams deeply understood the risks to their environment’s stability, so they asked very good questions of vendors and were not fooled by those offering a lesser service quality– which can lead to increased risk. Their technical knowledge and real-world data centre experience helped to protect the company
These days, experienced data centre operation members are too rarely involved in hardware support vendor choice. Yet, they are absolutely needed to help protect the company. The concerning new trend is this: IT procurement staff are unfamiliar with the standards originally designed by Third-Party Maintainers to proactively earn the credibility they are now receiving. These very high standards were designed to meet or even exceed the standards offered by the OEM for warrantied hardware. Unfortunately, those new to IT procurement are unfamiliar with what to look for and resort ONLY to “lowest price” strategies, placing little-to-no emphasis on service standards designed to protect mission critical assets.
Data center ops teams understand the risks, very well. IT procurement teams generally do not.
Top Five Risks Your Business Can’t Afford by Having a Price-Only Focus?
All of these are rooted in “time needed to return to operation” – or what IT folks call “Mean Time to Repair (MTTR).”
1. Grayed-out SLAs & Diluted Parts Plans: SLAs are funny things because they can easily be diluted to reduce internal costs so as to maintain margin. Yet, SLAs cannot be based on assumption for any mission critical hardware assets. Some independent vendors are now keeping parts regionally, not able to be delivered for 24 hours. Will IT Procurement have a thorough understanding of which hardware assets can be down for 24 hours and which ones cannot? Will your IT Procurement team understand that the SLA must read “FE to arrive on-site with parts in hand” for critical hardware systems? System downtime will negatively impact external and internal clients – some clients may even be lost! Hardware support is much like insurance – you will get only what you’re willing to pay for. Regionalised parts programs only make sense for non-critical (often very old) hardware that you no longer rely upon for significant operations.
2. Muddled Call-Home Technology/Methods: All critical hardware has call-home potential. Call-home refers to a technology used to alert remote parties (your staff and support providers) when the hardware is about to fail, in the middle of failing or has failed completely. Good call-home technology will advise the location, the serial number and REF codes that describe the problem and the parts most likely needing replacement. Not all call-home is created equal within the independent sector. For mission critical assets, the call-home tools provided by your independent provider MUST be solid. In maintaining high standards for your Mean Time to Repair, every minute counts. You cannot hope that someone in operations will walk past the hardware and notice a flashing light in under one hour. If you’re team is enabling lowest price solutioning, then providers will begin to believe that they no longer need to invest in this important infrastructure, or even include it in your support agreement.
3. Subpar/Untrained Field Engineers: Not every independent support provider has a robust FE recruiting team that can find technicians that can service all the assets on your support contract. If your vendor vetting process does not include techs asking technical questions of the techs, you are very likely to get technicians fluent in laptop repair and 100% reliant on phone support. It can be expensive to hire the right field engineers. If your vendor is being pushed to offer the lowest price, this is absolutely one critical area in which they will cut corners to maintain margin.
4. Untraditional Lack of Flexibility: The independent hardware support industry has worked hard for 40 years to earn a reputation as being incredibly flexible, especially when compared to the one-size-fits-all approach of the OEM. Your team can simply not assume that flexibility is great but has no financial value. Client (incident/asset) portals, for example, are built by humans and in this industry are often customized or built over time to client wishes. Here’s one self-promoting example I can share: A leading brand car manufacturer asked us to modify their portal views so they could see activity/asset data in ways that aligned with their structure. Those requested changes were completed during the phone call and under 15 minutes. Do you think that real-time customization to special requests will ever occur in under 6 months when you enable a price-only focus among support vendors?
5. Disjointed Account Management: If you expect lots of adds/deletes to your support agreement, or are hoping to have a liaison with whom you can dialogue about communications improvement, don’t expect much if you’re enabling a “race to the bottom” in pricing. People’s time costs money. If you expect to get good account management, with timely and professional responses, you may not want to indirectly imply that your account management isn’t worth much.
Would you buy the lowest cost homeowners insurance in a hurricane zone? Would you buy the lowest cost car insurance for your 17-year old son/daughter? More importantly, who is helping you properly vet your insurance options? If you have expert resources readily available to you, do you not use them all to help you make decisions that provide the least amount of risk?
To me, it makes no sense to not have IT procurement working with data center operations when choosing vendors to build your hybrid hardware support model. Yet, too many companies are doing this – taking risks that they really cannot afford.
John Donoghue, Senior Sales Executive, SSCS EMEA
John joined SSCS in 2018, bringing account development experience from Software Solved, Software Planet Group, Integritie, Taylor Made Computer Solutions, CCH and Universal Computer Systems – approximately 20 years in IT, consultative sales and account management. A resident of Portsmouth, UK, John earned his degree (with honors) from Trinity & All Saints College, a B.A. in Economics. In addition to his passions within Information Technology, he is Vice Chairman of the Bognor Rugby Club and a member of the Regis School Parents Council. He is a self-described “Rugby Fanatic” and enjoys every aspect of the game.