80% of IT Costs Occur AFTER the Purchase – What Can You Do About It?

Posted on September 29th, 2016 by Joel Nimar


Many businesses are discovering something very powerful – Enter third-party maintenance programs

According to one recent study, it's estimated that the average business spends as much as 6.4% of its entire annual revenue on IT expenses alone (Hardware & Software, Administration, Operations, End-User and Downtime). This is a large part of the reason why IT maintenance and support is such big business for original equipment manufacturers (OEM’s) – there's a very real market that must be filled, especially as technology becomes a more ingrained part of our lives on a daily basis. Yet OEM support is not without its issues – companies often force premature obsolescence through maintenance prices that increase rapidly, product milestones like End-of-Support or End-of-Software-Updates that come far too soon and more.

 

Hardware MaintenanceThis often leads to a situation where OEMs come out on top, even at the expense of the customers they're supposed to serve. Cisco Smartnet support and maintenance sales is a roughly $7 BILLION business in North America alone, yet how many business professionals can say that they're truly getting their money's worth out of what their OEMs are actually providing for them?

 

Enter: third party maintenance programs. In an effort to close gaps in service coverage and simply keep their IT infrastructure up and running as inexpensively as possible, many businesses are actually discovering something much more powerful. Third party maintenance programs often provide complete coverage in an optimized cost model, allowing them to spend less and extend the useful life of their technological assets.

 

Third Party Maintenance Programs: Saving Businesses Money in IT

 

According to a study conducted by Gartner, a full 80% of IT costs per asset occur AFTER the initial purchase under a traditional OEM maintenance model, primarily due to the 15% price increase per year in services for the first five years of purchase.

 

The most important thing to understand about third party maintenance programs is that they're not designed by OEMs to maximize their own bottom lines – they're designed by network and supply chain experts in an effort to maximize the benefits for end users. One of the ways this happens takes the form of a flat pricing structure, giving clients the peace-of-mind that comes with knowing their maintenance costs per asset will rarely increase.

 

Even going beyond the savings generated by a flat pricing structure, third party maintenance providers can also help reduce IT expenditures in a number of other ways. By providing continued support that goes beyond the periods that an OEM will dictate for EoS or EoL, these programs can help a company maximize the ultimate return on investment of their assets considerably. Third party programs are also inherently flexible, meaning that a company only has to pay for the services they need – though they still have the ability to scale up or scale down as those needs change.

 

Third party programs also bring with them the benefit of immediate access to specialized support which not only helps preserve the lifespan of an asset for as long as possible, but also goes a long way towards increasing operational efficiencies at the same time.

 

In essence, third party maintenance programs allow companies to do more with less in terms of their IT infrastructure. They preserve the life of assets for longer than OEMs will allow, increase operational efficiency AND get to enjoy one fixed monthly price at the same time. From every conceivable angle, businesses win via third party maintenance programs.

 

The Pyramid Approach

 

At Pyramid Technology Services, Inc. we believe that the benefits of third party maintenance provider don't have to end with simply reducing an organization's IT expenditures. Our unique business philosophy, coupled with the wide range of services we offer, allow us to act as more than just a hardware maintenance provider and instead we can become a complete, turn-key solution for all of your IT needs.

 

Our concierge service, for example, is a complete, white glove service that is customized from the ground up to meet a customer's individual needs. No two organizations utilize their IT infrastructure in quite the same way, which is why a "one-size-fits-all" approach to hardware maintenance just won't do. We also support both current equipment and legacy systems no longer supported by the manufacturer from over 100 different manufacturers including no less than 10,000 pieces of equipment. You don't have to worry about finding one company that specializes in HP Proliant hardware maintenance and a separate that is adept at Dell server maintenance – we do it all, and so much more, under one contract.

 

In Conclusion

 

These are just a few of the many ways that third party maintenance programs are reducing IT expenditures across the board for businesses in a host of different industries. For small and medium businesses in particular, third party hardware maintenance renewal is one of the best ways to cut costs and funnel that money back into a business where it belongs. It lets even smaller organizations leverage the latest that technology has to offer to their advantage, giving themselves the type of competitive edge they need to stand out in a crowded marketplace.

 

For more information on Pyramid’s third party maintenance programs or to get a quote contact us directly at 978-823-0700 or sales@PyramidComputer.com

 

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