The True Value of Maintenance Contracts

by Joe Gleinser 30. November 2009 17:26

VARs love selling maintenance contracts. They constitute about the only margin left on hardware. There can be very little cost to the VAR in service that maintenance contract. Why? Because they're usually a horrible deal for the client. Why spend $50k on a phone system and then spend $10k per year on a maintenance contract? Why not keep spare parts on hand for an extra $5k, one time expense? I rarely meet any client with any maintenance contract that doesn't complain about nickel and diming. Avoid this hassle by either not renewing maintenance contracts or by going with a lower end contract. If your systems are redundant, a lower end contract is an easy way to save thousands of dollars.

The one exception to this is for systems with non-standardized equipment. If your server rack is a mix of HP, Dell, IBMs purchased sporadically over the last 3 years, stocking parts may be difficult. Of course, since you're going to virtualize on standardized servers anyway this is a moot point.

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GCS Technologies provides technology services and solutions. You can read more about GCS at http://www.gcsaustin.com. GCS is available for project work covering the topics in this blog and other IT systems.

Fed Compliance

I know all of this stuff because I sell all of this stuff. I call it real-world experience, the FCC thinks it might be a conflict-of-interest.