CategoriesBlog

How to Continue Receiving Equipment ROI Long After the End-of-Life Date

Every piece of IT hardware your company invests in is in a state of decay. At some point in the future — be it 5 years or 15 — the original equipment manufacturer (OEM) will stop supporting it. They’ll phase out sales, charge more for service, and eventually, stop support for it altogether. It’s a prospect every IT manager considers as they make capital investments. And while that day may be far into the future for your new IT investments, it’s important to have a plan for end-of-life (EOL) action.

There are two options. The first means exploring IT asset disposition (ITAD): the responsible dismantling, disposal, or repurposing of antiquated equipment. This usually comes alongside an upgrade in IT equipment, which starts the clock on new investments. But many companies fail to realize the second option: continued ROI through an Alternative OEM Maintenance (AOM) service-level agreement (SLA). Breaking out of the OEM life cycle also means breaking free of the EOL date. Your equipment may very well have a few years to a decade more usability in it!

Responsible IT asset disposition

What happens when your equipment becomes so antiquated that it starts to encumber your IT infrastructure? What happens when security flaws creep up a year after OEM support for that device ends? There are many reasons to begin considering ITAD, and many options to review when that time comes.

Do you reset and resell equipment to recoup costs? Do you destroy and recycle your assets? Even within these seemingly straightforward options there are important decisions to consider — environmentally friendly asset disposal, for example. Companies can even explore certain charitable write-offs for donating used equipment. All these decisions and more fall within the realm of conscious, responsible ITAD. Far beyond wiping your hardware and chucking it into a dumpster, there’s a complete EOL plan, executed with precision.

The major flaw in most EOL plans is that they’re premature. Your capital IT investments aren’t as antiquated as you might think. They’re just under-served without continued OEM support. 

Maximizing equipment ROI through AOM

Most OEMs maintain a phase-out schedule for support and service. The problem is, this schedule is at odds with the manufactured life of the device. A rack server might have a 15-year lifespan; yet OEM support for that model might end at 10 or 12 years. Owners of that hardware falsely associate the end of support date as the cutoff point for hardware maintenance. It’s not. If you have an AOM SLA, the remaining 3-5 years of viable product life might not fall under OEM care, rather, a factory-trained Third-Party Maintenance (TPM) technician.

This is significant. Imagine the cost of one rack server is $2,000 and you have a data center with 100 of them. The cost breakdown of your investment on each rack over a 10-year support period is just $200 annually. In squeezing out an additional 5 years of life from your 100 rack servers, you’re boosting ROI by $100,000 beyond what you might expect to get from them by following OEM end-of-support. Or, in simpler terms, a 50% extension of life can equate to a 50% bump in ROI per unit.

More important than ROI, AOM can maximize the service life of your hardware to prevent disruption to your infrastructure. Upending your system to integrate new technologies when existing technology works as expected is a recipe for unnecessary problems. 

EOL action demands important consideration

As you begin to consider EOL action — be it ITAD or a shift to AOM service — plan according to key variables that affect your operations. Do you have the budget to finance new IT capital expenditures? Is there specific benefit to ITAD versus continuing to maintain products after OEM end-of-support dates? Determine if EOL is really the end of your equipment, or merely just the end of your OEM service contract.

Regardless of your choice to pursue proper ITAD or opt for an AOM SLA for continued ROI, there’s a decision every IT manager must make as equipment EOL dates approach. The OEM has set the expiration date for your equipment; it’s up to you to choose how to deal with that ultimatum, and it depends very much on the operability of your current assets. In either case, ALTNET is ready to help. Our goal is to simplify both ITAD and AOM, so you get the most out of your IT capital investments all the way through their EOL dates.

CategoriesBlog

Alternative OEM Maintenance (AOM) is the Next Evolution of Third-Party Maintenance (TPM)

For as long as companies have been digitally connected, there’s always been a question of how to best service their IT infrastructure. Staff an in-house, factory-trained tech team? Pay for original equipment manufacturer (OEM) support? Outsource to a third party? There are pros and cons to each option. But there’s also an interesting anomaly. Despite being the most cost-effective, comprehensive option, many companies avoid third-party maintenance. Why?

The connotation has always been that third party lacks the capabilities of OEM and isn’t as reliable as an in-house team. That is, of course, incorrect. No one is sure where the mischaracterization comes from, but it certainly isn’t refuted by OEMs.

Third-party maintenance (TPM) has had a bad rap for too long. Thankfully, the time for a rebranding has come due – chiefly in part to the changing nature of the industry. Today, companies are starting to take a second look at Alternative OEM Maintenance (AOM).

AOM offers modern IT service solutions for businesses seeking a smarter way to keep their digital infrastructure up and running.

The shift from TPM to AOM

Many companies are familiar with the acronym, TPM, as well as its connotations. TPM engineers don’t have the skills or knowledge to service OEM equipment. TPMs deliver a lower caliber of service. The list of myths and misconceptions goes on and on. OEMs have made an entire industry out of misguided mistrust of TPM service providers.

AOM represents a rebranding of what TPM is and always has been: an affordable, reliable, flexible service. More importantly, AOM brings new qualities into the fold. As demand for solutions providers grows and evolves at-scale, AOMs have harnessed streamlined supply chains and factory training to deliver adaptive solutions. The result? Companies enjoy OEM-caliber maintenance at a fraction of the cost.

AOM is the new TPM. And like TPM, the flexibility makes it an enticing option over OEM.

AOM empowers companies to recapture ROI

AOM’s benefits are immediately clear in a world of planned technology obsolescence. The name of the game becomes return on investment (ROI). How much of an initial investment in IT infrastructure can a company recoup by maintaining its technologies?

Instead of paying for astronomical service level agreements (SLAs) that grow more expensive as the technology ages — or shelling out significant cost to upgrade perfectly viable equipment — companies see higher ROI on equipment thanks to lower AOM costs.

The opportunities to maximize ROI don’t stop there, either. They’re continually compounded throughout the service life of the equipment, lengthened by AOM. Companies see additional bottom-line savings in the form of:

  • Longer useful hardware life, beyond OEM end-of-service (EOS) dates.
  • Flexible coverage options and company-specific AOM SLAs.
  • Broader competition in the TPM market, driving competitive AOM rates.
  • Single service provider partnerships for multiple OEM hardware lines.

The cost savings compound as companies continue to invest in their established IT infrastructure via AOM. 

If it’s not broken, don’t fix it

IT spending represents a significant portion of most mid-sized companies and large-scale enterprises. And that spending will increase as demand for larger infrastructure becomes apparent. These companies need to ask themselves an important question: is it worth the cost to re-tool an entire system to support growth?

For many, the answer is no. There’s real value in incremental upgrades, piggybacked onto a system that’s well-maintained and proven to work. Upgrading for the sake of expansion simply isn’t cost-effective — especially not in the current economic climate, which is trending deeper into a cost-conscious mindset. And while OEMs continue to push upgrade cycles as the path to staying current, it’s a business model that’s just not feasible for many businesses. These dollars are better spend maintaining and expanding what already works.

Product and system life cycles are getting shorter and the cost of replacing these systems is only getting higher. But replacement isn’t the only option. Companies aren’t as resigned to planned obsolescence as they might think. AOM takes the benefits of TPM and reinvents them for a new era of IT cost management.