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June 27, 2013

Guest Blog: Time to challenge the status quo

Mike Sheldon, CEO at Network Hardware Resale, examines how IT departments can help companies get more bang for their buck.

By Cbr Rolling Blog

Mike Sheldon

It’s no surprise that businesses are tasked to do more with less when it comes to their IT budgets, as they prioritise increasing revenue and customer acquisition. However, while cost cutting remains a top priority for the IT department, many businesses are missing out on huge opportunities for significant cost savings by prematurely upgrading networking infrastructure. In addition to this, companies are overlooking the importance of having a viable maintenance solution that actually offers return on investment, by failing to effectively scrutinise contracts.

In an effort to better understand how the IT department evaluates and selects networking technology vendors, schedule equipment upgrades and gauge awareness of and sentiments around third party maintenance agreements, we commissioned a study with Forrester Consulting. The study found that even though IT budgets are under constant examination, businesses have defaulted to vendor influence. Inevitably, this means that they are failing to realise the rewards of extending hardware lifecycles and third party maintenance solutions.

The research identified that while equipment upgrades are predominantly driven by new functionality requirements, 56% of those surveyed reported that actually the industry average refresh cycles recommended by the OEMs (sometimes unnecessarily) encouraged this decision.

Functionality upgrades and strategic technology changes aside, industry reported averages govern networking equipment timelines. Actually, infrastructure and operations teams should ask whether a functionality upgrade is optimal to the business – is networking equipment built better, and can it last longer, thereby delivering more value to the business? Where does this refresh cycle number come from?

Regardless of size, organisations should recognise that there are viable options through third-party providers that can help them alleviate some of the budget concerns, without sacrificing quality or reliability of equipment and services.

We recommend that infrastructure and operations teams should ask themselves the following questions:

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  • Is the business getting the most value out of the equipment – will it actually last longer?
  • Do we need all the maintenance support services we were sold? In many cases, companies are paying for a maintenance contract that has a software update line item even though software updates come free with the product’s basic warranty. In some cases, the vendor no longer even offers software enhancements.
  • Are there market alternatives to hardware maintenance support?
  • What metrics should we be using to measure the value of the hardware and support services?

If you’d like to find out more and work out what you should be asking yourself when considering hardware upgrades and maintenance contracts, read Challenging the Status Quo on Maintenance Contracts and Refresh Cycles to Lower Costs – I’d be interested to hear your thoughts.

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