Get More Joy Out of Hardware Maintenance Agreements

Author: Steven Zolman

Name an IT expenditure that businesses loath paying but can’t seem to live without.   Actually, that probably opens up a lot of IT products and services to criticize, but let’s start with hardware maintenance agreements.  To believe your hardware supplier, it is an absolute necessity to protect yourself in the event of hardware failures and, like software support agreements, your access to all the neat software updates that enhance their product.   Of course most enterprises want to have protection in the event of failure and keep on top of critical software updates, but most basic hardware warranties are by design a shell of what the enterprise actually requires in the event of a hardware failure, often compelling the enterprise to purchase a supplemental support agreement to provide 24x7 4 hour or next business day response at significant additional expense.

It is no secret that hardware maintenance agreements are a significant source of high margin revenue to the supplier and the unprepared customer is at the mercy of the supplier when it comes to hardware maintenance.   This is the case across the board, whether we are talking about Cisco, HP, IBM, and EMC among others.  The supplier often makes it difficult to separate hardware from software support.  They often introduce a large dose of fear, uncertainly and doubt if the customer decides to self-maintain their hardware, not subscribe to software support or use the services of a non-OEM hardware maintenance provider.  They intentionally make it very challenging to work around alternative models of support.

The pricing for hardware maintenance is often very obscure, overly complicated, with a lack of transparency of what actually makes up the cost to cover a particular product.  To make matters worse, the supplier inventory, or asset management, of covered hardware is often poorly maintained, particularly as products normally come and go in the routine course of the term with refreshes and new projects.  This leads to a challenging auditing process during the agreement renewal.   And despite the customer’s best efforts at keeping track of equipment, there is little faith the supplier renewal inventory and, consequently, the invoice is correct.  Is there a better way?

Like any insurance policy, and that is very much what a hardware maintenance agreement is, there is a need to balance the risk with the costs to mitigate the risk.  All too often consumers of hardware maintenance sign up for the highest level of hardware replacement, such as 24x7 4 hour response parts replacement, without any thought to the loss expectancy of this hardware or what level of service is actually required for the hardware in question.  Does a development server necessarily require 4 hour response for hardware replacement?  Does a four year old network switch require software support?  More thought should be given to support levels and balancing risk and the actual loss with the cost to insure against or reduce the impact of this loss.

Self-maintenance, such as having your own spares onsite, is a legitimate approach to hardware replacement, particularly for more commodity hardware or hardware with less volatile firmware update requirements.  Further, the non-OEM alternative hardware maintenance suppliers, often referred to as 3rd party maintenance, is a very legitimate and often superior alternative to OEM maintenance.   These suppliers are often focused solely on maintenance with resources with skills sets equivalent to the OEM and hardware replacement depots strategically placed that can match and often exceed the response time of the OEM hardware replacement capabilities.   They are often superior administrators of their assets under management leading to less painful renewals.  And best of all they are much less expensive than OEM maintenance.

This is the right time to take a holistic view of your hardware maintenance renewals and investigate your maintenance alternatives.   IBM, Cisco, HP, and EMC are prime targets for improving maintenance value and lowering costs.  NET(net) has significant experience in helping clients navigate the complexities of supplier maintenance agreements and the myriad options available  as they seek to lower their maintenance costs.  Contact NET(net) and we can help you and your company Find Value, Get Value, and Keep Value in your IT agreements – including your hardware maintenance agreements. Contact us today at, by phone at + 1 866 2 NET net, or visit us online at

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