the value of a hybrid support strategy

Technology @ Your Pace®

The Value of aHybrid Support Strategy

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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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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.

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 operat-

ing 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 Value of a Hybrid Support Strategy

The Hybrid Approach

OEM HYBRID TPM

Collaboration

Security

Application

Foundations

Data and Analytics

Mission Critical Network,

Compute, Storage

Reliable Hardware,

Stable Software

TheNetwork

OEM & VAR

Non-Critical Gear

with High Density

End-of-Sale

End-of-Support

Maintenance Self

Supported

Third Party

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

$

Cost SavingsDon’t pay for free software

Don’t pay for 100% attachment

Don’t pay for software that is not

coming

50-60% savings

Methodology &

FlexibilityLeverage density

Enjoy month-to-month

and 1 year contracts

Ability to terminate

without penalty

The Support ExperienceAccelerate the mean

time to repair

Customize the support model

Technology vs

product expertise

Asset SweatingExtend the useful life

of your equipment

Upgrade at your pace,

not the OEM’s

OPEX saving and

CAPEX avoidance

Advantages of TPMOne Size Does Not Fit All

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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.

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 – espe-

cially 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.

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What is third-party maintenance (TPM)?


TPM programs arehardware support solutions provided by vendors independentof the OEM.

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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

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.

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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$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.

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

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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.

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

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.

The role of a spares program and thesecondary market

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.

Finding the right combination

$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’ssupporting.

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

Manufacturer BrandedDirect access to TAC

Experienced IT staffs

SMARTnet, Foundation

Care, J-Care

Consistent across

manufacturer

Service Provider (VAR)Quicker escalation

Co-delivered support

10-30% savings

Audited by manufacturers

TPMIPS delivered support

Considerable variance

in quality

50-60% savings

Buyer beware

Self-SupportSparing model

Requires on-site personnel

Hardware considered

disposable

~ 80% savings

Maintenance OptionsEnabling and Protecting the Enterprise

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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.

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

OEM Maintenance

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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

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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$0Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Maintenance Capital Expense Depreciated Value

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

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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.

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

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

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

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

Hybrid Support Considerations

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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.

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.

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The OEM service contract myth

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.

Case study – How much a hybrid maintenancesolution could save you

Impact of

Failure

Security

Exposure

Level of

Integration

Reliability of

the Hardware

So�ware

Stability

$Depending on your business model, and the product you’re acquiring, you have a number of options that can simul-taneously save you money and keep riskat bay.

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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

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:

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

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

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.

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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.

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 experi-

enced 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

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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Real-world examples of how hybridsupport can work

$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.

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

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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

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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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.

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

the value of a hybrid support strategy

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