The Value of a Hybrid Support Strategy

Technology @ Your Pace®

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The Value of a Hybrid Support Strategy Key Takeaways of this Paper: • Hybrid support is a combination of OEM support, third-party maintenance (TPM) offerings, and a spares program.

• Many TPM programs cost as much as 50-60% less than traditional OEM support offerings..

• TPM is a great option for technologies such as edge routing and switching, and other branch applications.

• Using spares is ideal for devices such as wireless access points, access switches, and phones.

• Continually backing devices with the OPEX costs of maintenance might actually be more expensive.

• A hybrid solution can provide needed coverage at a lower price.

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The Value of a Hybrid Support Strategy

In today’s business economy, organizations are seeing dramatic increases in the cost of supporting their IT hardware and software. Many of these organizations’ budgets are being squeezed so hard that they are foregoing support contracts altogether – a risky proposition.

$ A well-designed hybrid support strategy allows you to choose which options provide the best coverage for your technology infrastructure, while making the most of your operating expense (OPEX) budget.

Support programs offer valuable and necessary services, acting as insurance for hardware failures and providing risk tolerance diagnostics. The key is finding a way to right-size your support solution for your organization’s unique needs.

Employing a hybrid support model can allow you to do just that. A well-designed hybrid support strategy allows you to choose which options provide the best coverage for your technology infrastructure, while making the most of your operating expense (OPEX) budget.

What does a hybrid support strategy entail?

Building a hybrid support model means using a combination of OEM support, third-party maintenance (TPM) offerings, and a spares program to provide coverage for your technology infrastructure. Understanding each of these elements and what their role should be in your support strategy is imperative – especially when your job is evaluated largely on your ability to minimize downtime, keep costs low, and use technology investments to support business growth.

The Hybrid Approach OEM

HYBRID

Collaboration

TPM

OEM & VAR Reliable Hardware, Stable Software

Security

The Network

Application

Non-Critical Gear

Foundations

Data and Analytics

with High Density Self

Third Party

Supported

Maintenance

End-of-Sale

Mission Critical Network,

End-of-Support

Compute, Storage

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The Value of a Hybrid Support Strategy

What is third-party maintenance (TPM)?

Third-party maintenance is a subject matter garnering a great deal of attention in today’s climate of discovering creative ways to extend technology budgets. No longer a novelty solution, TPM is increasingly becoming common practice.

TPM programs are hardware support solutions provided by vendors independent of the OEM.

In short, TPM programs are hardware support solutions provided by vendors independent of the OEM. TPM offerings are essential in a hybrid support model – which entails using a mix of OEM support, TPM and sparing strategies where each is appropriate.

OEMs will always advocate that you should use their support offerings on every piece of hardware in your network, but how cost-effective can that be in the long run? OEMs provide great replacement programs with numerous options, but you might be paying a premium price for features you don't really use or need – especially if the hardware you’re supporting is end-of-life (EOL) or end-of-sale (EOS). In fact, some OEM support pricing strategies are designed to force a hardware upgrade.

At what point does an OEM maintenance program reach its point of diminishing returns? When that happens, TPM programs are a smart alternative that feature a number of benefits.

Advantages of TPM One Size Does Not Fit All

Cost Savings

Methodology &

The Support Experience

Asset Sweating

Don’t pay for free software

Flexibility

Accelerate the mean

Extend the useful life

Don’t pay for 100% attachment

Leverage density

time to repair

of your equipment

Don’t pay for software that is not

Enjoy month-to-month

Customize the support model

Upgrade at your pace,

coming

and 1 year contracts

Technology vs

not the OEM’s

50-60% savings

Ability to terminate

product expertise

OPEX saving and

without penalty

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CAPEX avoidance

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The Value of a Hybrid Support Strategy

Cost savings Many TPM programs cost as much as 50-60% less than traditional OEM support offerings. This point is significant for a number of reasons. Saving budget money is always a priority, but it’s imperative to be selective in the areas where you look to

$ Using a reliable support program that costs up to 50-60% less than what you’d pay for OEM maintenance allows you to extend your budget to other areas where your business may need it.

save.

While maintenance may be considered a nonstrategic spend, that doesn’t mean it can’t become a smart way to maximize value in your investment. Many IT pros fail to realize that over time their maintenance investment winds up costing more than their initial capital expenditure (CAPEX) for the hardware. Using a reliable support program that costs up to 50-60% less than what you’d pay for OEM maintenance allows you to extend your budget to other areas where your business may need it.

That’s a smart strategy that will take your organization further than it has been before.

Flexible, customized support One of the drawbacks to OEM support is that it’s hard to get individual attention.

Let’s face it – sometimes you’re just one of many to the OEM. How can you really get prioritized service in a situation like that?

The advantage of working with a TPM provider is that you get individualized attention and a model that is customized to your needs. With a TPM strategy you can enjoy the flexibility of month-to-month contracts and the ability to terminate your contracts without penalty. These are services you won’t get from the OEM.

The advantage of working with a TPM provider is that you get individualized attention and a model that is customized to your needs.

Plus, with a TPM provider’s quicker attention to your needs you can accelerate the mean time to repairing your issues. You receive immediate priority escalation.

Faster problem resolution and less time waiting on-hold for a representative to help increases productivity for you and your team. With a TPM provider’s quick attention to your needs you can accelerate the time spent repairing your issues.

Maintain your infrastructure The term “asset sweating” may sound like some sort of exercise regimen for your technology, but it actually means maintaining your investment longer than an OEM cycle suggests you should. So sweating your assets means you hold onto them after the OEM has deemed them EOL and EOS.

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The Value of a Hybrid Support Strategy

Extending the useful life of your technology is a wise strategy. Due to its low failure rates, and high production quality, the useful life of networking hardware far exceeds the timeline for OEM-suggested upgrades. The longer you maintain your infrastructure allows you to reduce your CAPEX significantly. Then, if you factor a TPM program into your solution, you greatly reduce your OPEX as well.

If your equipment is EOL or EOS, it’s actually likely that the OEM support you attach to it costs more than the value of the hardware it’s supporting. Switching to a TPM solution allows you to maintain your current technology infrastructure at a price that that is most effective for your budget. This allows you to upgrade your technology investments at a pace that makes the most sense for your business needs – instead of having the OEM dictate your strategy.

The role of a spares program and the secondary market

Due to its low failure rates, and high production quality, the useful life of networking hardware far exceeds the timeline for OEM-suggested upgrades.

Incorporating a spares program as part of your hybrid support solution is another way to heighten peace of mind. What could be better than having hot, swappable spares ready on-site at a moment’s notice? Of course, the first thought that comes to mind is finding a way to afford spares when it’s hard enough to fund your primary technology investments.

This is where the secondary market comes into play. If you find a reliable vendor of

$ If your equipment is EOL or EOS, it’s actually likely that the OEM support you attach to it costs more than the value of the hardware it’s supporting.

used networking hardware then spares become an economically viable option.

There are a number of benefits the secondary market can bring to your organization, but identifying a viable partner is essential.

Look for a vendor that can provide details on their testing and certification processes. They should provide equipment that is backed by a lifetime warranty and a reliability rating that is greater than 99 percent. These are indications that they provide reliable equipment, and will maximize value in your investment. This makes a spares program a smart way to supplement your support strategy.

Finding the right combination Understanding each option at your disposal allows you to build a support structure that suits your unique needs. Every support offering has its pros and cons, and it’s up to you to decide which option will work for each technology platform in your infrastructure. But here is a simple rundown and some suggestions on where and how to use each offering.

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The Value of a Hybrid Support Strategy

Maintenance Options Enabling and Protecting the Enterprise

Manufacturer Branded

Service Provider (VAR)

TPM

Self-Support

Direct access to TAC

Quicker escalation

IPS delivered support

Sparing model

Experienced IT staffs

Co-delivered support

Considerable variance

Requires on-site personnel

SMARTnet, Foundation

10-30% savings

in quality

Hardware considered

Care, J-Care

Audited by manufacturers

50-60% savings

disposable

Buyer beware

~ 80% savings

Consistent across manufacturer

Manufacturer Support OEM offerings provide robust support and a multitude of options – every level of coverage you might require is available. The drawback to OEM support is that it can be costly, and that price remains the same or increases as the hardware it’s backing ages. So you have to be cognizant of where you are investing in OEM support.

$ As the OEM’s planned obsolescence of the gear approaches, the price of support increases.

It makes the most sense to use OEM support on mission-critical core technologies – data center core switching, chassis switching, core routing, WAN routing, and WAN optimization controllers. These elements are critical to your operations and are best suited for OEM same-day replacement, OS updates, and software support, especially early in their lifecycles.

However, it’s wise to use a few simple guidelines when assigning value to OEM support as your equipment ages. Don’t pay for what you don’t need. Don’t pay for what’s not coming. Don’t pay for what’s free.

The graph below shows the depreciating value of the hardware over its lifetime, compared to the cost of OEM maintenance. As the OEM’s planned obsolescence of the gear approaches, the price of support increases. At this point, many times the maintenance plan costs more than the hardware it’s supporting.

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The Value of a Hybrid Support Strategy

OEM Maintenance

Maintenance

Capital Expense

Year 2

Year 4

Depreciated Value

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0 Year 1

Year 3

Year 5

Year 6

Year 7

Year 8

Once the planned obsolescence phase is reached, fewer services are included with the OEM support. Operating system updates cease and software support is no longer available. In addition, some OEM support centers will only handle your service calls if you run the latest OS version. Instead of resolving your issue, this only makes the problem worse. When this point is reached, it makes sense to consider other maintenance options.

Service Provider Service providers (VARs) co-deliver authorized support with the OEM. This option allows for quicker escalation of your requests, and can feature 10 to 30 percent

Some OEM support centers will only handle your service calls if you run the latest OS version.

savings over support directly from the OEM. The savings is a nice feature of using VAR support, but the drawback is that you can experience inconsistent delivery methods. Not all VARs are created the same and some provide better support than others. Each OEM can have tens of thousands of partners – it’s hard to know what kind of service you will receive. But the price savings and the opportunity for more individual attention make VAR support an opportunity worth researching.

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The Value of a Hybrid Support Strategy

Third-Party Maintenance As referenced earlier, TPM can provide a great deal of benefits. It’s important to recognize the areas where TPM is best suited, in order to take advantage of the cost savings and flexibility it provides.

TPM is a great option for technologies such as edge routing and switching, access point controllers, application delivery controllers, and other branch applications.

TPM is a great option for technologies such as edge routing and switching, access point controllers, application delivery controllers, and other branch applications.

It’s ideal for legacy equipment and technology with limited software capabilities, which lessens the necessity of frequent upgrades.

Starting with TPM on edge hardware allows you to grow more comfortable with your coverage and your support partner. A good TPM partner will provide customized support that draws on a deep array of technical assets and expertise. They are incented to solve your problem or need, not just to end the phone call quickly (as you might find in larger support providers like OEMs or VARs). These support teams work under the expectation of quality service and customer satisfaction, not quickness and volume of cases handled.

Self-Support A self-support model consists of using spares and the internal resources to support them. While it’s rarely realistic to use spares to back all of the hardware in any given infrastructure, they can be a smart decision when used strategically. It’s about

$ Backing devices continually with the OPEX costs of maintenance might actually be more expensive than the CAPEX cost of spares, without any return in the long run.

finding that sweet spot between spares and maintenance coverage.

You have a certain number of devices that are either mission-critical or highly important in your network. Backing them continually with the OPEX costs of maintenance might actually be more expensive than the CAPEX cost of spares, without any return in the long run. If you back that important equipment with spares, not only do you get nearly instantaneous replacement in the case of a failure, but you can also always get a return on your investment in those spare technologies.

This strategy allows you to save recurring OPEX on maintenance programs, using them only for units that you deem are worth the expense. A sparing program does require on-site personnel with the expertise to handle the transition between units if necessary, but this is a judgment decision each organization needs to make when assessing their capabilities.

It makes the most sense to use a sparing model with devices such as wireless access points, access switches, and phones.

It makes the most sense to use a sparing model with devices such as wireless access points, access switches, and phones. This is the kind of equipment that is generally quick and easy to replace. But spares can be incorporated anywhere in your network. It’s imperative that you take a critical look at your infrastructure to see where spares can work for you.

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The Value of a Hybrid Support Strategy

Hybrid Support Considerations

Impact of

Security

Level of

Reliability of

Software

Failure

Exposure

Integration

the Hardware

Stability

The OEM service contract myth Every IT professional knows what it’s like when the OEM rep is talking to you about the LAN upgrade you’re contemplating and they give you a series of reasons why you MUST have an OEM service contract – “cradle to grave” – and if you don’t, terrible things will happen. Here is where it’s important to be able to separate facts from fiction.

$ Depending on your business model, and the product you’re acquiring, you have a number of options that can simultaneously save you money and keep risk at bay.

Keep in mind it’s in the OEM’s best interest to recommend support like this, but that’s not necessarily what’s best for you. The OEM generally doesn’t have any other options – you do. It’s all about understanding what you’re getting for your organization’s hard-earned money.

Depending on your business model, and the product you’re acquiring, you have a number of options that can simultaneously save you money and keep risk at bay. If you work with a vendor who provides refurbished equipment and third-party maintenance you can expand your choices and build a solution that works perfectly for your needs. The ability to blend support options gives you the best chance of succeeding at the lowest overall cost.

Case study – How much a hybrid maintenance solution could save you As you’re considering your needs and building a strategy for your support coverage, two major considerations come to the forefront. This first is making sure you’re covered in the event of any outage, and the second is ensuring you get the best value possible in your investment.

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The Value of a Hybrid Support Strategy

A hybrid maintenance model is a smart way to lower OPEX and maximize your uptime, but how could it work in a real-world scenario? CXtec recently took part in a project that illustrates the benefits of hybrid support perfectly.

A large organization that sells product worldwide came to us with a problem – they felt they were spending too much on OEM service contract costs. The organization

$ In the end, this organization saved a significant amount of money by blending OEM maintenance contracts along with TPM NBD hardware replacement.

asked for a flexible maintenance program that would keep its factory networks up and running, yet save them considerable OPEX budget.

As a provider of TPM, and an advocate of the hybrid support model, we assessed the organization’s needs to right-size a maintenance solution for them. This process consisted of a number of diagnostic steps and recommendations: • Reviewed their service level agreement (SLA) needs to determine what turnaround/ availability the organization required.

• Catalogued the massive list of equipment the organization had for its offices and manufacturing plants.

• Took into account that much of the organization’s LAN/WAN equipment was very old.

While this equipment would need to be replaced in case of a failure, we also sized the

It’s a matter of working with a partner who has the best wishes of your organization in mind, and can offer the expertise to assess your needs and make beneficial recommendations.

pricing/length of our maintenance offering to take into account that a replacement might also be an upgrade (this affected the organization’s spares program).

• Recommended an OEM maintenance contract with onsite support for some remote sites with no technical personnel. In the long run this solution saved the organization money by not having to deploy one of its own technicians for any issues.

• Shortened the overall turnaround time on critical manufacturing floor failures by strengthening the organization’s spares program. We recommended a next-business-day (NBD) TPM replacement plan in some cases to replenish the spares program where needed.

In the end, this organization saved a significant amount of money by blending OEM maintenance contracts along with TPM NBD hardware replacement. Doing this in parallel with a strong spares program to reduce turnaround time left the organization in a good position to minimize their risk of downtime.

It’s a matter of working with a partner who has the best wishes of your organization in mind, and can offer the expertise to assess your needs and make beneficial recommendations. You have the opportunity to cater a hybrid maintenance solution to your specific circumstances and needs.

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The Value of a Hybrid Support Strategy

Real-world examples of how hybrid support can work The great part about hybrid support strategies is that they’re customizable to each organization’s needs. Consider these situations that could save considerable budget money for organizations that are smart with their support investments.

$ Once your network is stable, then you can drop down to a lower-cost paradigm that might include any mix of TPM, hardware warranty and/or spares.

Example 1 – NBD and Spares Imagine a given organization, because of its Payment Card Industry (PCI) security requirements, must have OEM service contracts to maintain the latest and greatest software versions on its equipment. It could save money by simply purchasing a third-party 8x5 NBD replacement contract (as opposed to a more expensive OEM 24x7x4 contract), along with some refurbished equipment for spares. In this scenario, if a piece of equipment fails, it can be replaced as quickly as possible. The organization could then allow the OEM replacement to come with a slower hardware replacement turnaround time.

Example 2 – Begin with OEM For organizations that are on a tight OPEX budget, but are not thoroughly experienced with networking equipment, it’s usually wise to use an OEM service contract for at least the first year to work out “the kinks.” Once the network is stable, then the organization can drop down to a lower-cost paradigm that might include any

$ If an organization is willing to consider buying refurbished equipment and TPM, it can realize significant OPEX budget savings.

mix of TPM, hardware warranty and/or spares.

Example 3 – Don’t Require “Latest and Greatest” If an organization is willing to consider buying refurbished equipment and TPM, it can realize significant OPEX budget savings. This option works best for organizations that don’t have any “latest and greatest” requirements and are adverse to the cost of OEM service contracts. It’s the scenario that enjoys the broadest range of options for equipment and maintenance purchases.

A quality vendor of refurbished networking hardware will offer a competitive warranty on its products. This warranty can provide ample coverage for less urgent requirements. In situations where more insurance is necessary, a TPM plan can allow you to choose a quicker turnaround time for your replacements. Then when you need immediate replacement, purchasing pre-owned hardware is a perfect solution. It allows you to incorporate hot swappable spares at a big discount off list price.

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The Value of a Hybrid Support Strategy

Consider a hybrid support solution

$ There’s no need to take on extra risk because you don’t feel you can deliver a solution that fits into your OPEX budget.

Understanding the concept of a hybrid support solution allows you to choose which options will provide the best coverage for your technology infrastructure, while still meeting that tight OPEX budget. Instead of considering going without support, know the options at your disposal. There’s no need to take on extra risk because you don’t feel you can deliver a solution that fits into your OPEX budget.

A hybrid solution will allow you to find the ideal combination that provides the coverage you need at the price that works best for you. Plus, it prevents you from becoming locked into any single vendor’s offerings.

Having options at your disposal enables a stronger position for you as you choose your technology partners and platforms, and that enables you to bring maximum value to your organization. You can decide how your technology investments can

A hybrid solution will allow you to find the ideal combination that provides the coverage you need at the price that works best for you.

best facilitate your needs and drive your business to new heights.

And as you delve into hybrid support, you become empowered to build a solution that best fits your unique circumstances. Keep in mind, though, it is imperative to do your due diligence when selecting partners for your maintenance. It’s easy for vendors to say they will be there to back your investment, but will they? You need to truly know your technology partners so that you can rely on their stability to provide the support you need.

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