Since IT maintenance and support are critical and necessary parts of any IT budget, it would seem these line items...
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would receive more attention and scrutiny than they do from IT decision makers. After all, companies spend a healthy percentage of their annual IT budgets to manage, update and service existing equipment. As every IT budget is under constant scrutiny, here are five tips for reducing your IT maintenance costs.
Audit network assets on an annual basis. Aside from creating an accurate inventory, this process should reveal critical information, including where devices are in the continuum of the OEM support lifecycle. When accounting for what can be hundreds or thousands of devices -- worldwide, in some cases -- you cannot blindly expect OEMs to have your best interests at heart.
Expect to be surprised. For example, it's not uncommon to find out you are paying OEM support on equipment that isn't in your network anymore. Frankly, OEMs might not know this, either -- or they don't want you to have such visibility because keeping the status quo represents easy, recurring revenue. Know your assets and only pay for what you have.
Look for the tipping point: when OEM support no longer makes fiscal or physical sense. There are three things you pay for in OEM maintenance contracts: Cisco Internetwork Operating System (IOS) updates, technical support and hardware replacement. With the IT maintenance audit completed, now you can determine where your assets stand regarding these three factors. If you do an ROI analysis and focus on the three things you are paying for, it becomes clear it makes little financial sense to stay with OEM support if -- after four years -- one-third of what you are paying for is no longer there or relevant. And don't expect the OEM to say, "There will be no more IOS coming, so we'll lower the price of our support by one-third." That is not happening, so it might be time to investigate options.
Know your options to OEM support. It should quickly be evident that the value from OEM maintenance changes dramatically over the seven or so years OEMs typically provide support. Along the way, expect the OEM will designate some of your network assets as end of support (EOS) or end of life (EOL). Those dates may or may not be communicated clearly.
While EOL and EOS gear typically represents small portions of the total infrastructure, this equipment should receive further evaluation. Why pay for pricey support if there will be no more software updates, or if the OEM will no longer support or replace the product? If the gear is perfectly suitable for its current use, extend its lifecycle and switch to a third-party provider.
Consider the combined Opex-Capex impact. It's a fact of doing business: If you consider third-party maintenance (TPM), OEMs may come in at the 11th hour and drop their maintenance prices to try and keep your business -- and sometimes, that works. But before celebrating any savings you may be offered, look at the bigger picture: the combined Opex-Capex impact.
Shouldn't network upgrades be performed according to your schedule, not the OEM's? Why rip out perfectly good devices just because the OEM says you have to? Moving to TPM can delay that major expenditure. Let's assume a customer pays $100,000 for annual maintenance on some 300 access switches that the OEM now said have to be replaced. The new annual maintenance tab: $150,000. If the end user had investigated a third-party provider, that cost may have been $27,000.
Consider the full financial impact and write-off of extending the life of those devices by five years and opting for TPM. The payout then is $133,000 -- $27,000 x five years -- versus $2.3 million -- $1.5 million + $150,000 x five years. That should get your attention -- and your boss' as well.
Put maintenance out for bid. Always put your IT maintenance contracts out for bid. By creating an open competition to secure your business, you have sent fair warning to OEMs, their channel partners and third-party providers alike to respond to your request for proposals with their best offer. Then, make sure you compare apples to apples; in other words, are the service-level agreements truly matching? What does sparing look like? Is it 100%? These things become very important, and it's a buyer's journey. If you are careful, diligent and open to new options, the results can bring impressive gains to your budget and reduce your IT maintenance costs.
About the author: Holger Peters is vice president at Curvature.
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