If only servers could last forever! The reality, however, puts the average life of a server at five years. Other equipment in your network isn’t far off. With hardware procurement taking up a significant chunk of enterprise spending, getting the highest return on investment (ROI) on every device purchased makes sense.
While the life of your equipment is finite, there are ways you can get the most out of it and increase the return you get on your investment. Of course, maintenance plays a vital role in the lifecycle management of hardware. However, a strategic approach can ensure hardware pays for itself in the long run.
In this article, we will discuss the following:
- How enterprises can make the best of their investments on hardware.
- What tasks can help them do that.
- How to make the best of CapEx.
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Understanding ROI on Hardware
Defining ROI for hardware isn’t so straightforward. As most equipment depreciates in value with use and time, if you measure the ROI based on its value, you’ll only get a negative ROI. Instead, the ROI on hardware can be derived from the value it brings into your operations.
In other words, ROI for hardware is subjective, as it depends on various factors. You should ask questions like:
- Is the equipment you’re buying solving a specific problem?
- Does it help improve the performance of other equipment or users?
- Does it help protect data from existing and emerging threats?
- Does it add new capabilities for your teams or make their job easy?
Consider the following example to understand ROI on hardware better:
A mid-sized IT consulting firm was grappling with slow data transfer speeds. Their network infrastructure showed weaknesses as they onboarded more clients and facilitated more data transactions.
After evaluating their network architecture and performance, they discovered that their switches were causing bottlenecks. As these switches were older, they were handling large volumes of data poorly. So, they decided to refresh all the switches and add more with increased bandwidth, Quality of Service (QoS), and link aggregation, among other capabilities.
The bill for refreshing and increasing the number of switches came to $20,000. The bottlenecks were eliminated upon installing the new switches, and data transfer speeds improved. Subsequently, the company added five more clients, which increased its annual revenue by $30,000.
If we consider the added revenue as the return on their $20,000 investment in new switches, the refresh gave them an ROI of 150 percent or $10,000.
How to Get the Maximum Return on Hardware?
Buying new hardware is a significant expense for enterprises with any level of on-premise infrastructure. It typically falls under Capital Expenditure (CapEx), which can range from a few thousand to millions of dollars, depending on device type and quantity.
With an investment so significant, you should make every effort to maximize the returns. Here are some practical ways to improve the ROI on hardware procurement:
Regular Maintenance and Health Checks
Whether it’s big-ticket equipment like servers or end-user devices like computers or peripherals, maintenance is vital to ensuring the device runs as it should. With new devices, the manufacturer typically covers maintenance.
Regularly updating firmware and applying bug/security fixes in time can ensure the equipment in question runs smoothly around the clock. The manufacturer's warranty will ensure it’s replaced in the unfortunate event of failure.
On top of the vendor-provided maintenance, you may also want to conduct periodic health checks on the device and monitor its performance.
With time, the performance and capacity of hardware can deteriorate. Keeping a check on device-specific metrics through vendor or third-party tools can give you a glance into the remaining lifespan of the device and whether it can continue to support your organization’s requirements.
Maintenance Beyond Service Life
The end of service life (EOSL) is a critical stage in the hardware lifecycle. It’s typically accompanied by end-of-support and maintenance from the manufacturer. While the device’s official lifespan may be over, its use can be extended with the help of third-party maintenance (TPM).
Depending on the network device type, the EOSL duration can range from three to seven years (sometimes even longer). However, you have fewer options after the device hits the EOSL date. Using it with the help of TPM can further increase the value it creates for your business.
Maintaining equipment like servers and storage arrays beyond EOSL delays the refresh cycle. In short, the longer the hardware lasts, the higher the return you get. Extending the use beyond EOSL is only feasible if the device functions well and meets the current performance requirements.
OneCall by PivIT has helped many clients extend their hardware’s life beyond manufacturer-stipulated durations. With affordable maintenance and technical support for legacy equipment, many enterprises can retain expensive equipment for longer, essentially recuperating their initial investment.
Sell It Off
Another viable option for maximum return on your hardware investment is to sell it off after using it. This can be a good option for those who need to refresh their equipment because of business or technical needs, but their existing devices are in good shape.
Selling legacy equipment can return some of the investment you made. When you add that to the value the hardware created for your business, the overall returns may be much higher.
Legacy equipment, including servers, switches, routers, and access points, can be sold to another organization or a reseller.
PivIT’s Buyback Program is designed to help clients get rid of their legacy equipment in exchange for credit towards buying new equipment or services. It’s an effective way to turn old gear into CapEx and reduce the refresh bill.
Strategic Refreshes
Managing the hardware lifecycle with a strategic approach can also increase the overall returns through the device's lifespan. In other words, create a strategy for retiring equipment based on usage, importance, and remaining service life.
For instance, if specific devices aren’t used to their total capacity, it may make sense to sell some to refresh those that get used to their total capacity and wear out faster. Similarly, you may want to extend the lifespan of expensive equipment to delay pricey refreshes.
Using the right tools, map the lifecycle of all the hardware, particularly mission-critical equipment whose failure can result in downtime. Based on your requirements and the state of your equipment, you can take strategic actions to maximize the ROI of every device.
Making the Best of CapEx
Whether your enterprise is entirely on-premise or you’ve taken a hybrid approach, hardware will often form a significant part of your CapEx. You want your CapEx spending to go a long way and provide a profitable return, which can be made possible with TPM.
PivIT provides various options for businesses to reduce their CapEx while obtaining the most value from the equipment. PivIT’s procurement services can significantly reduce hardware purchase costs through discounts on leading OEM products.
With OneCall, you can delay refresh cycles and continue using legacy equipment with spares guaranteed. Lastly, you also have the option to trade in equipment for credit. PivIT helps you keep your CapEx in check while providing ways to improve your infrastructure and achieve your business goals.