Outsourcing Going Green – Raising the Retirement Age of IT Equipment
With government drives for public sector efficiency and private sector organisations facing continued capital expenditure freezes, no organisation should be embarking upon hardware replacement without excellent business reasons. Yet vendor policies of increasing support costs by upwards of 150% after the initial warranty period and refusing to support products outside of a sometimes unreasonably small service life window is leaving many organisations feeling they don’t have a choice.
As Paul Timms, Operations Director, Maindec, explains, it doesn’t have to be like this and third party support services can not only help drive down costs, but by extending the life of IT equipment, can help organisations improve their green credentials and meet efficiency targets.
Efficiency Drive
With continued economic uncertainty, going green will have slipped down a lot of organisations’ agendas, even though being environmentally sound and cutting costs can in fact co-exist to produce an efficient and profitable outfit. Yet every day across the country in both public and private sector organisations, equipment that is performing well, is stable and continuing to meet business needs is being ripped out and replaced at huge cost to the customer.
Is this simply another example of the throwaway society; reinforcing the perception that technologists are obsessed by the latest equipment, from the smallest PDAs to the most powerful servers?
Or is it, in fact, a response to the vendor strategy of hiking support/maintenance costs by up to 150% as soon as a product comes out of the three year warranty period? Or that vendors are actually choosing not to support equipment that is more than five years old? In the face of these strategies, it is perhaps no surprise that many organisations perceive the only option is to move to new hardware under warranty.
Realistic Business
Is it really necessary to replace a machine that is perfectly reliable; that delivers the performance required and, critically, has a stable operating system/application environment? The cost is not simply associated with upgrading the hardware. More often than not the new hardware will be running on a different operating system, requiring changes to the underlying application. The organisation will have to embark upon a development and migration project; it will have to incur the risk associated with environment change; and, if a financial institution, the demands of application recertification to achieve regulatory compliance.
From a vendor perspective it makes perfect sense to encourage customers to upgrade every few years. Not only is this strategy generating a strong revenue stream but by limiting the range of equipment that has to be supported to the most recent product set, vendors can carry a smaller range of spare parts and provide engineers with training only on the latest kit, all under the guise of providing you with equipment that is more environmentally sound.
Understanding Choice
There is a strong market of third party support organisations, as well as excellent international supply of spare and refurbished parts. Third party support contracts instead of a supplier’s out of warranty tariff can save any organisation 50% on service costs. In addition, by not upgrading to the new software infrastructure, there is no need to continue paying software license fees, further reducing costs.
But how does the quality of service compare? With aging kit running business critical applications, organisations will be understandably concerned about reliability, the speed of availability of spare parts and the responsiveness of any support operation. No business will want to delay a hardware upgrade if it jeopardises uptime or compromise operational performance – the business cost will be simply too high.
This third party support market is well placed to offer an exceptional level of service required by critical systems. To be at their most effective, support companies need highly skilled engineers with experience in a raft of different hardware platforms of very different ages. Regional distribution centres are needed, with spare parts always available to meet customer’s specific hardware requirements; and they need a support process that provides customers with rapid access to experienced engineering expertise as soon as a problem occurs.
Business Decision
Of course organisations need to upgrade systems. But should these replacements really be carried out every three years simply in response to the vendor’s hike in support costs? Or can outsourced service providers provide another way?
The argument that each successive generation of hardware, from servers to storage devices, is being developed to support the environmental agenda, is a common one, but should this really be enough to encourage the regular upgrade strategy? The new equipment will, indeed, consume less power. But is it really greener to scrap an entire system every three years in favour of one that uses a few less Amps and perhaps demands less data centre space and air conditioning? It is far better for the environment to extend the life of existing equipment even by a couple of years than continually rip out and replace.
Irrespective of whether it is reducing capital expenditure or improving green credentials that drive the agenda, organisations should be making upgrade decisions based purely on business need. Is the system performing effectively? Can it efficiently support additional storage? In the end, doing what makes sense for the business may be greener than it appears.
There are very real environmental benefits associated with extending the life of hardware, and it is clear that simply upgrading in response to the vendor’s support pricing policy does not make sense from a CSR (Corporate Social Responsibility) stance, not to mention the impact it may have on the bottom line. Organisations, despite what they are told, do have a choice, so why not help them go green and raise the retirement age of IT equipment?