Spares Beat Service Contracts Hands Down
Posted by
Howard Marks
December 23, 2010
I'm sometimes amazed at how much of my clients' IT budgets go to pay for service and support contracts they don't really need. Too many IT guys can only sleep soundly under the security blanket provided by a 24-7 service contract with guaranteed four-hour response times, so they just have the vendor include gold-plated service on everything they buy. I've found that, in many cases, a few spares and next business-day service can save my clients a bundle.
A few weeks ago a CIO client of mine asked me to look over a quote that his network team had sent him for upgrading the wiring closets to provide gigabit to the desktop. The network team was planning to buy 30y Cisco 3750 48-port switches at $7,000 each, plus 24-7, four-hour SmartNet coverage for another $1,400 per year for each switch.
I suggested the CIO buy 32 switches and cover them all with next-business-day SmartNet contracts so they could legitimately install patches and IOS upgrades. The NBD coverage was half the price of the 24-7 contracts, so even with the two spare switches, the organization would save $5,500 in the first year. From that point on, it will save $22,400 a year and, frankly, provide better service to the users connected to those switches.
With spares in the parts locker, the network team at my client can dump the saved config of a failed switch onto a spare and have the spare installed in the wiring closet in an hour or two. Had they paid extra for the more expensive SmartNet, they'd either be scrambling to jury rig a temporary solution or leaving users without service until the tech arrived with the replacement parts--and that could take a lot longer than four hours. Remember, the typical service contract obligates the vendor to respond in four hours but doesn't obligate them to have the right parts when they arrive.
Now that even smaller organizations are virtualizing their servers, the commonality in their vSphere server farms makes servers, like Ethernet access switches, relatively stateless devices bought in volume. To see how my spares idea would work out for servers, I priced a Dell R710 with a pair of Xeon 5650 processors and 64GB of memory, a nice vSphere host. The system costs $8,125 and comes with three years of 10-hour-a-day, five-day-a-week, next-business-day service and support. Upgrading to 24-7 support costs an additional $2,200, so I can buy one spare for every five servers and come out ahead.
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