How Businesses Unknowingly Pass on Big IT Cost Savings

How Businesses Unknowingly Pass Up On Big IT Cost Savings A new study from an independent research firm uncovers that businesses miss a big opportunity for significant capital (capex) and operational (opex) cost savings by prematurely upgrading networking infrastructure and insufficiently scrutinizing ongoing maintenance contracts. 1. High Pressure to Reduce Costs "How concerned is your firm with the following business issues?" Concerned Very Concerned Rising pressure to reduce costs 37% 39% Reducing IT operational costs to free up money for new technology development and product/service innovation 37% 35% 2. Refreshing Networks Too Often Up to 79% of organizations refresh their wired networking infrastructure every 1 - 5 years guided by industry averages that originate from the vendors. "When thinking about each technology, what is your refresh cycie?" 11 year 12 years 13 years 14 years 15 years 16 years 17 years 18 years 19 years 10 years or more 5% 3% 2% 1% 19% Campus Networks 10% 22% 16% 39% 10% 19% 4% 19% Data Center Networks 20% 17% 33% 11% Routing (WAN) 2% 11% 21% 17% 28% 9% 7% 3% 1% Wi-Fi 4% 16% 23% 15% 24% 3% 4% 5% 19% 3. Disposing of Working Equipment 85% of respondents admitted they would have kept working equipment if continued vendor support had been available. 12% 10% to 100% "What percentage of equipment would you have kept if the vendor Less than 10% continued to support it?" 85% I Don't know 4. Not Leveraging 3rd Party Options 80% Few organizations know they have options: An overwhelming 80% of respondents say they would leverage third-party maintenance if they found it to be more affordable! 20% "If there was an option to purchase support and maintenance contracts from a third party, would you ado it if Yes No the cost was lower?" What You Can Do About It: Keep what's working. Organizations should take a pragmatic WINNER view of their infrastructure and do assessments of what services need to be delivered and which the infrastructure can handle. Be aware! Don't pay for software updates if there are none, or if they are available for free. Put maintenance contracts out for competitive bid. Consider third-party options in addition to those from other resellers. Put metrics in place to reward value, quality, and longevity, not just resiliency. idi Source: Challenging the Status Quo on Maintenance Contracts and Refresh Cycles to Lower Costs - May 2013 - A commissioned study conducted by Forrester Consulting on behalf of Network Hardware Resale. 304 IT decision- NETWORK HARDWARE RESALE Santa Barbara • Dallas • New York · London · Amsterdam · Singapore makers surveyed across 8 countries (USA, UK, Germany, France, Japan, Singapore, India and Australia) and conducted from Jan. – Feb. 2013. © 2013, Network Hardware Resale, LLC