Third-Party Maintenance Expenses: What’s the Cost?

Did you know that 90 percent of Fortune 1000 companies use managed service providers? It’s true. Information technology (IT) functions, including maintenance, comprise many outsourced services, and cost is a significant factor. 

The original equipment manufacturer (OEM) is most enterprises' maintenance/warranty provider (at least those buying new equipment). However, many companies choose to go with third parties simply because it makes economic sense.

Hesitation to hire a third party to maintain critical equipment in your network is understandable. However, the advantages make it worth considering. So, what’s the price tag on third-party maintenance (TPM)?

In this article, we’ll discuss the following:

• The advantages of hiring a third party.
• What does a comparison of costs look like between TPM and OEM support?
• How much it costs to maintain equipment with a third party.

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Why Choose Third-Party Maintenance Over OEM?

Not every enterprise is driven by cost-saving tactics, as many are willing to pay top dollar for high-quality services. While OEM-provided maintenance may seem like the natural choice, TPM has unique advantages that may be relevant for companies without budgetary constraints. 

Here’s why TPM often comes out on top of OEM support:

Flexibility and Customizability

TPM can be more business-friendly, given the flexibility and customization of service plans. They can provide various services, as per your needs, bundled together in an excellent package with service level agreements (SLAs) that work in your interest. 

On the contrary, with OEMs, you’ll find they decide the rules. More often than not, they may bundle services you don’t necessarily need but have to pay for anyway. Secondly, the SLAs may be standardized with a one-size-fits-all approach – not necessarily great for a business with unique requirements and a global presence. 

With TPM, you can pick and choose the services, like engineering support and spare management, based on your specific requirements. In other words, you pay only for what you need. 

Support Beyond EOSL

Perhaps the biggest driver of enterprises choosing TPM is support for legacy equipment. Once hardware reaches the end of service life (EOSL), it loses maintenance from OEM. And should they continue to provide it, they do so at heavy premiums to push the customer to purchase new hardware. 

TPM providers, like OneCall at PivIT, specialize in maintaining legacy equipment beyond its stipulated service life. 

Cost-Saving

Maintenance by third parties is inherently cost-effective, especially when compared with OEMs. Whether it’s the bundled services at a discount or the delay of a refresh cycle, you walk away with savings. 

More importantly, OEMs use maintenance as leverage to push customers to buy hardware. After all, selling hardware is their business. Therefore, it’s not uncommon for OEMs to have strict terms or extremely expensive contracts for older equipment. 

How Much Does TPM Cost? Is It Cheaper? 

Of course, it’s all about the numbers at the end of the day. So, how does TPM fare against OEM maintenance in terms of pricing?

Consider the maintenance for Cisco’s 3850 Series switches, which have reached the end of life. These switches, whose replacement is the more advanced but more expensive Catalyst 9300 Series, are some of the most frequently used switches in IT and non-IT enterprises. 

Here’s the maintenance cost comparison between SmartNet, Cisco’s maintenance offering, and OneCall, a TPM service for WS-C3850-48P-S:

• SmartNet 8x5xNBD: $1,147.50 (12 months)
• OneCall 8x5xNBD: $150 (12 months)
• Price Difference: 67%

By putting one Cisco 3850 Series switch under OneCall instead of Cisco SmartNet, you save 67 percent, or $997.5. That’s a massive saving, especially if dozens or hundreds of these switches are deployed on your campus or branch offices. 

The maintenance from OneCall at $150 for this switch includes 24/7 technical support and next-business-day hardware replacement. 

So, it’s safe to say that TPM is significantly cheaper than OEM support. And the best part is that there’s no trade-off regarding service level. 

How to Use TPM to Lower Your OpEx or CapEx

Third-party maintenance presents a unique opportunity for companies to control and reduce operational expenses (OpEx). As we’ve already seen, it costs much less than OEM. So, switching to a contract with a third party like OneCall will automatically result in savings per device per contract.

But there’s more – while you reduce your OpEx by choosing the cheaper TPM support, you also save CapEx. When you switch to TPM for devices nearing or having reached EOSL, you push the refresh cycle anywhere from several months to a few years. That frees up CapEx budget.

In other words, TPM can serve as a solid cost-saving strategy for both OpEx and CapEx in good and bad times. 

This year, companies from various industries were pushed to cut IT costs because of rising inflation and lower spending. In such a scenario, TPM is a cost-saving mechanism, providing the backup you need at affordable prices, even with a low budget. 

Moreover, the savings from OpEx can ultimately be diverted toward CapEx when it’s finally time to refresh equipment. 

Your maintenance strategy can be pivotal in saving money, and TPM support like OneCall can enable cost-saving measures. 

Choose OneCall as Your TPM Partner 

Maintenance is a critical component of any enterprise’s IT strategy. The reliability of your infrastructure hinges on the level of support you have. More and more companies rely on channel partners for services like maintenance, which also offer savings. 

While not all third-party maintenance providers may offer significant savings compared to OEMs, OneCall can. 

Maintenance should solve your problems, not create new ones. There is a better way to manage your IT maintenance. Get coverage tailored to your networks and confidence knowing when something happens, it will be handled right away. Try OneCall today!