By Steven Foss, Senior Sales Executive, SSCS North America
Many companies and/or industries going through marketplace disruption now have mandates to cut operational expenses, when and where possible – especially when doing so does not impact the client experience. Industries, such as Oil & Gas, are now seeing reduced profits and executive teams are pushing cost containment throughout the organization. Retailers, too, are experiencing disruptions from consumer preferences to spend less time in a store and doing their buying online.
Executive mandates to contain costs are also now impacting the IT department. The CIO/CTO is actively looking for fresh ideas or pockets where costs can be cut, without sacrifice to client experience. Are you in data center operations or an IT procurement professional that has received similar mandates? If so, read on, please.
Are you familiar with third-party hardware maintenance, what we prefer to call independent hardware support? Are you aware that Third-Party Maintainers can significantly reduce operational expense (OpEx) by 50-60% from OEM costs, on servers, storage and networking gear? Did you know that if greater than 10% of your hardware infrastructure is post-warranty, or even End of Support (EoS), the cost savings can be stunning?
Did you know that Gartner ran a study in the last few years and have reported:
• 71% of Fortune 100 companies are using Third-Party Maintainers for a portion of their assets, and
• 59% of Fortune 500 companies are using Third-Party Maintainers for a portion of their assets.
Are you one of the 29% of Fortune 100s or one of the 41% of the Fortune 500s that are not using Third-Party Maintenance as an effective means of containing costs? Or, are you simply a smaller company needing to find greater cost efficiencies, but have not yet tried Third Party Maintenance?
Perhaps you should consider these points:
• In March 2016, Gartner’s Christine Tenneson, Research Director, Hardware & Software Support, published the following statement. “End-user interest and demand for alternatives to OEM support for data center and network maintenance are increasing, fueled by a need for cost optimization.” Gartner [Doc. ID G00294372] In the same published research, Tenneson also stated, “Hardware maintenance is increasingly being considered as a “nonstrategic IT” spending and procurement, with the result being that IT professionals are seeking low-cost alternatives to expensive OEM contracts.”
• In March 2017, Gartner’s Stanley Zaffos published a report named, “Lower Both Storage Acquisition and Ownership Costs by Using Third-Party Maintenance.” He stated, “Many third-party maintenance (TPM) providers are delivering quality storage array break/fix support to stable storage systems with savings typically in the 40% to 70% range.” In the same document, he also offered, “The useful service life of storage arrays, which is seven to eight years in clean data centers, is almost always greater than their planned service lives.” He also stated, “TPM represents a significant opportunity to reduce costs, negotiate lower rates from vendors and/or extend the useful service life of installed storage arrays.” Gartner [Doc. ID G00324284]
• In September 2015, IDC analyst, Rob Brothers, published a report named, “Third-Party Maintainers and the Enterprise Datacenter: Still Gaining Ground” [Doc # 258887]. In the article summary, “Enterprise customers have made it very clear they will utilize third-party maintainers and not just for cost savings,” says Rob Brothers, VP, Software and Hardware Support Services at IDC. “The easy-to-do-business aspect they have eluded to in the survey is surely a compelling differentiator.”
With valid points, such as these, are made by industry experts illustrating the trends of your peers, you might want to consider the following questions more closely: (1.) Do we have valid rationale for not exploring a cost-reduction option that is becoming more commonplace with our industry peers or competition? (2.) Have we hesitated because of trust issues or issues relating to security or reliability?
Regardless of your answer to either of these last two questions, we would highly suggest an open discussion with an unbiased industry analyst at Gartner. In our opinion, the most knowledgeable about this industry niche is Christine Tenneson at Gartner. Alternatively, I’d welcome a call to schedule an appointment with key members of our team that can and will fairly address what you now deem as risks. In fact, you might even be delighted to hear about our perspective on “Service Quality” and the education potential that surrounds this important subject. We’re here to help!
Steven Foss, Senior Sales Executive, SSCS North America
Based out of Minnesota, this is Steve’s fifth year with SSCS, yet joined the organization with several decades of experience in IT sales and building solutions for the data center professional, as well as IT procurement. In his early career, Steve spent 24 years with DecisionOne, then created additional client value with roles at Northrop Grumman, StorageTek and Sun Microsystems. Before landing at SSCS, he sold to a tight geography for two small Third-Party Maintainers, which were based in Minnesota. In addition to building value for his clients, Steve is passionate about fitness and visits the health club 6-7 times each week, rides bicycle and water skis in the summer months, cross-country and downhill skis in the winter months. Every day, over the lunch hour, Steve takes a 3-mile walk to enjoy the fresh air, but wanted all to understand his smartphone goes with him.