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Technology / Data

Businesses miss out on huge IT savings

Despite a concerted effort by businesses to reduce unnecessary IT costs, many companies miss out on big IT cost savings each year by prematurely upgrading networking infrastructure and insufficiently scrutinizing ongoing maintenance contracts.

A new study by Forrester Consulting on behalf of Network Hardware Resale found that although 76% of IT decision-makers are concerned about the pressures to reduce costs, many are unaware of the available options that exist for alternative maintenance contracts and are unduly influenced by vendors regarding hardware refresh cycles.

According to the study, up to 79% of organisations refresh their wired networking infrastructure every one to five years guided by industry averages that originate from the vendors.

It also revealed that vendors set the end of life agenda resulting in the sometimes unnecessary and expensive replacement of IT equipment — that still carries market value and has 20-plus years mean time between failures.

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The Forrester Consulting study stated: "After surveying 304 IT decision-makers, Forrester found that even though IT budgets are under constant scrutiny, businesses have defaulted to vendor influence which has blinded them to the rewards of extending hardware lifecycles and third-party maintenance solutions."

Other Forrester study findings included:

  • End of Life (EoL) equipment is prematurely retired: 85% of respondents admitted that they would have kept their legacy networking equipment if the vendor continued to support it.
  • OEM maintenance services have little return on investment: More than 80% of organisations buy maintenance contracts from their equipment manufacturer even though they see little value in what they are purchasing and express discontent over misrepresented cost savings, new fees, and inflexible pricing models.
  • Third-party maintenance options are widely unknown: Only 21% report that they have leveraged competitor third-party bids when negotiating service and maintenance contracts, while 80% claim they would leverage third-party maintenance if they found it to be more affordable than their current contract.

Mike Sheldon, CEO, Network Hardware Resale, said: "Businesses of all sizes need to know that there can be incredible value and cost savings with a reliable third-party maintenance service provider – helping to ease worries about tightening IT budgets without sacrificing quality."

This article is from the CBROnline archive: some formatting and images may not be present.