By John Kolkmeier, Director, Global Service Delivery, SSCS

I understand that both Gartner and IDC estimate that the average data center (globally) contains 18-22 percent post warranty hardware assets. Why would you pay IBM to support post warranty servers and storage when a very robust market for independent hardware support has existed for over 30 years?

Did you also know that most OEMs will increase their monthly support pricing the older the server or storage device becomes? In all truthfulness, the independent hardware support (also called, “Third Party Maintenance”) market does just the opposite of the OEM – we almost always reduce support pricing as the hardware grows older. There are, of course, rare exceptions when critical back-up parts are incredibly difficult to find and quite expensive.

Breaking Piggy Bank on IBM CostsUnlike the OEM, we exist to save you money while providing you the best possible support. In such instances when older asset support pricing has plateaued, we’re likely to consult about hardware alternatives that are not new, but only a few generations old, which allows you to maximize your savings potential.

It is important to know that, on rare occasions, not every device is a perfect fit for third party maintenance. Reasons could include the instability of the device, ongoing software development by the OEM or a product could be a blended solution that includes support from multiple OEMs.

I believe it is the TPM providers responsibility to fully recognize these risks and be totally transparent with the client, thus not introducing any risk. I am proud to say that at SSCS we adhere very strictly to this service standard, which only increases client confidence in our support solutions. There are many times our legacy clients look to SSCS to provide this insight and depend on our vast knowledge and continuous training to provide the best path forward.

One last point I would like to make is the importance of creating leverage for yourself in any negotiation – especially true in long term relationships. If your post warranty assets are moved to a TPM, you’ll likely see better bundled (hardware and maintenance) pricing from IBM when you really do need to refresh that equipment. Also, when you hold the OEM financially accountable for hardware models that were launched before all the bugs were worked out, you’re less likely to be seen as an “early adopter” that will take risks with hardware and absorb the costs/risks when that equipment fails to meet its promises.

A hybrid support model, where the OEM is maintaining assets under warranty and the independent market is maintaining post warranty assets is rapidly becoming more common. I recently read a Gartner report stating that over 70% of Fortune 100 clients are using TPMs for a portion of their post warranty hardware assets.

Some are most likely focused on the cost savings, but I bet that most are adopting this hybrid model for the cost savings AND for the negotiating leverage that becomes possible. If you’re unfamiliar with the independent support industry, you’ll benefit greatly from reading this freely available white paper.

John “JK” Kolkmeier, Director, Global Service Delivery, SSCS

This year will be John’s 29th year with SSCS Global IT Services. A graduate of University of Houston, Clear Lake, most of John’s field service career has been with SSCS. Having several years of experience in direct field service and break/fix maintenance for multiple OEMs and platforms, John was promoted to Global Service Director eight years ago. All global field support and OEM subject matter expertise reports up to him.

In addition to his deep levels of interest in data center support best practices, John is an avid outdoorsman and conservationist, committed to non-profit groups dedicated to habitat protections and enhancement. He is also an avid fan of all sports, with a great appreciation for golf.

1 Comment

  • John, I agree and completely understand your viewpoint on this topic. I have worked in the 3rd party maintenance business since 1984 about the time when on-site 3RD party I.T service expanded.
    I remarket IBM UNIX server hardware to 3rd party maintenance companies at a fraction of the cost based on IBM’s refurbished list price.
    I can’t imagine what the end user pays for T&M service from IBM. In most cases, the cost of spare parts will drop in price 90-95 percent of the time.

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