Benefits of Third Party Maintenance

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1 Benefits of Third Party Maintenance Overview Third party maintenance is becoming a more appealing option for businesses when choosing maintenance options. The main driving force is the price difference between third party maintenance providers and OEMs (Original Equipment Manufacturer). However, there are other reasons that influence the decision and several other benefits businesses can enjoy by exploring alternative maintenance solutions. This paper outlines the reasons that are driving more and more businesses to seek alternatives to OEM support and the benefits of third party maintenance. The paper details how businesses can save money without sacrificing quality of service using Abtech Technologies as an example of a third party maintenance provider.

2 Introduction In recent years there has been a massive surge in interest in third party maintenance agreements, mostly driven by the significant cost savings that can be achieved. Typically savings of up to 70% on OEM maintenance costs are achievable by using specialist thirdparty support, and a lot of the cost moves from capital budget to running costs on the balance sheet. There are of course factors other than cost to take into account, and this white paper aims to discuss these and their possible solutions. The Explosion of Interest in Third Party Maintenance Services To cite one example, over the past few years, there has been a large increase in the number of ERP users (Enterprise Resource Planning) that are interested in using a third party maintenance Service. In 2009, less than 20% of companies polled were considering third party maintenance. This figure increased to almost 42% in 2010 and to 57% in i The interest in third-party maintenance contracts appears to be driven by five main factors: The yearly increase in OEM maintenance costs from most manufacturers Extending the life of IT equipment Budget constraints on maintenance costs and capital investments Dissatisfaction with OEM services Multi-vendor installations OEM Support Typically 50 to 70% of an IT budget goes toward maintenance of hardware and software, so it is no surprise that companies are always looking for ways to reduce these outlays. OEM manufacturers have a degree of conflict of interest in the provision of maintenance services, since their main business model involves developing new systems. They must provide support in order to sell systems, but always prefer customers to upgrade to the latest hardware and software rather than continue to keep existing equipment in good working order, even if it still adequately meets their needs. Many OEMs increase the cost of maintenance services year after year, become less committed to providing a top-level and rapid response service as time goes by, and can also end support for older products well before the end of their useful life. The organizations which use these products would prefer to have well-defined costs over a period of years and the guarantee of continued and responsive maintenance services for as long as the products meet their requirements. There is thus a mismatch between the OEM's driving motivations and those of the users. This is a gap which third-party maintenance provides are ideally placed to fill. Abtech Technologies August 2013 Third Party Maintenance 1

3 Extending the Life of IT Equipment When capital expenditure is under tight limits every effort must be made to avoid unnecessary expenditure on upgrading to new systems. The available budget must be directed at those areas of the company's operations which would most benefit and computer hardware and software is often overlooked. It is not uncommon for the existing systems to be underutilized, and to have the ability to handle significantly greater workloads. Third-party service suppliers are able to provide a totally unbiased analysis across the whole IT structure of a company, even when it has equipment from multiple vendors. Making better use of existing systems can delay the need for upgrading by several years. In addition when some new capital expenditure becomes available, users can ensure that upgrades are only made to those system elements which are causing the problem. With some innovative thinking and reconfigurations it is possible to upgrade incrementally and without major expense and disruption to operations. Only third-party providers can provide this kind of service, since they can take a completely unbiased view focused entirely on the company's requirements. Such providers must, of course, have detailed technical knowledge of a wide range of hardware and software solutions from many different manufacturers, and this is an important factor to look for when choosing a provider. The Effects of Budget Constraints With the current financial climate placing severe restrictions on budgets, managers are required to consider all possible means of keeping the same or better level of IT operations while minimising costs. This is why many are now considering third-party services instead of the traditional 3-year replacement of equipment through the OEM. OEM's of course have to recoup the huge investments they make in new research and development and have to by some means to pass these costs on to the customer. Third-party providers do not have such constraints and are therefore potentially able to give better and faster service at a lower cost. They are also able to tailor maintenance packages which precisely meet the organization's needs, instead of the limited 'one size fits all' options from an OEM. Organizations can therefore ensure complete control over costs. For example those parts of the IT systems which are critical to business operations can be furnished with a higher level SLA which guarantees minimum downtime or even 24/7/365 operation. Other parts of the system which are not so critical can be covered by a reduced service. A good third-party supplier will be able to configure a package which minimizes costs but provides full maintenance at the required level. Dissatisfaction with OEM performance OEM's often generate a large proportion of their profits from maintenance support, but also use price incentives, limitations of SLA's and even minimal response which only just meets the SLA requirements in order to influence customer's behavior in a way that benefits the OEM rather than the customer. In other words, their focus can be on the shareholders rather than the customer. Abtech Technologies August 2013 Third Party Maintenance 2

4 These kinds of difficulties can lead to deterioration in the standards of service, and spiralling costs. In these situations third-party SLA's can offer the following advantages: Immediate response from engineering staff, rather than a call center Broader support experience from technicians Fast access to spare parts from stock Continued support well after the equipment has reached end-of-life By and large, those who move from OEM to third-party providers report higher levels of satisfaction with the service. Multi-Vendor Installations Organizations which have equipment from multiple vendors face a particular problem, which is not easily solved using OEM maintenance services. Examples abound where the different vendors blame each other for a fault, leading to long downtimes and additional expense. Frequently technical staff from two or more vendors must be called on-site at the same time, which is difficult to arrange, time consuming, expensive and may not be covered by the SLA of the OEM(s) who are not at fault. This is a situation where only third-party support can provide a satisfactory solution. You deal with just one company whose engineers have a deep knowledge of all the vendor's systems. In practice this provides a faster response and will be completely covered by the SLA. It is, of course, necessary to choose a provider carefully, one which has proven expertise in all your hardware and software. It may also be possible to get a maintenance agreement which covers customized changes to a software installation. OEMs will generally not support such changes, but independent providers may do so. At the very least, they will be more willing to assist and more likely to be able to solve the problem, since their technicians will have experience beyond the narrow confines of a particular system. Cost Factors Cost is obviously one of the main factors to be considered when moving to third-party maintenance services. Since independent providers are focussed entirely on the business of maintenance services, they are able to provide flexible SLAs matched to the individual needs of your business. Typically such agreements can reduce costs by 40 to 70% of an OEM's service, and frequently achieve this with a better level of support. Contract agreements can last for as many years as you wish, and the costs are completely predictable and specified within the agreement. You have the advantage of knowing that you will receive the same level of service throughout the agreement period even though equipment will be aging. Customers will also have their own account manager and customised support at every stage. There are now strong economic factors driving the move towards independent service providers. OEMs are using maintenance services to support their research and development programs, and are achieving high profit margins on these services. The customer might Abtech Technologies August 2013 Third Party Maintenance 3

5 benefit from this in the longer term through the availability of improved hardware and software, but many organizations have to take a shorter term view. They need to protect their profit margins over periods of a few years while the economic climate is difficult, and one very effective way to do this is by reducing the cost of maintenance and extending the life cycle of existing equipment. Replacement Parts OEM's often control the cost of spare parts in ways that do not benefit their customers. Although the parts market seems competitive on the surface, an OEM will often give preferential prices to one particular reseller, so that there is no real competition at all. When choosing a third-party maintenance provider it is essential to find one which keeps large stocks of parts, both new and refurbished, so that they are not subject to the whims of the OEM. Proactive Maintenance Traditionally maintenance services have been reactive. No action is taken until a fault is logged. However, an early warning system which detects potential problems before they become serious is an important requirement for critical installations. What seems to be a minor fault can sometimes indicate a deeper underlying cause, which if allowed to develop unchecked can result in a major failure. Proactive maintenance is designed to discover such problems as soon as possible. OEMs offer such early warning monitoring for their own equipment, but the scope is limited. Where you have multi-vendor or customised installations the only solution is to turn to independent providers, who have experience across the board. Proactive maintenance will also be able to identify possible bottlenecks and weak points in an IT system. It enables security issues and breaches to be found more quickly. In addition those areas of the installation which would restrict operations during peak workloads, or when average demand is planned to increase, can be found at an early stage. The advantage is that there is more time to properly plan an upgrade, minimize disruption to normal operations, and find the most cost-effective solution. Also, of course, using a third-party provider ensures that the upgrade is not limited to one particular OEM. Typical Solution At this point it is instructive to consider an example of how a typical third-party maintenance provider can meet all of the above criteria. Abtech Technologies is a 3 rd Party Service Provider with over 20 years of experience. By being responsive to customer's needs Abtech has built up an eclectic mix of technical expertise across most of the leading vendor's systems, and are well placed to provide responsive multi-vendor support on a wide range of systems. Abtech Technologies August 2013 Third Party Maintenance 4

6 Multi-vendor support is offered across a range of hardware and software installations, including IBM, HP, and Dell servers. Storage solutions include Dell, IBM, Red Hat, EMC and Dot Hill. Add to this software support for Microsoft, VMware, Red Hat and Quest amongst others, plus Cisco Cloud and Extreme Networks networking support, and you have a company able to provide multi-vendor support covering most of the systems and software in common use. Even if an organization has only a single vendor set-up, access to technical staff experienced in a wide range of systems is of value. When it becomes time to upgrade, it allows an organization to take a wider view of the available technologies. There may well be significant advantages in diversifying to more than one vendor. Only a third-party provider will be able to give unbiased advice in such cases. Let us look at how a company like Abtech Technologies can reduce the costs of maintenance services. Faster Fault Resolution Because hardware and software support is Abtech s core business Abtech is able to streamline operations and allocate just the right level of support at the right time. Using the wide range of experience across many different types of installation t Abtech is able to build an effective database of fault resolution, and thus minimize the time an engineer needs to spend resolving a problem. It is likely that an identical or very similar problem has already been resolved by previous investigations. An OEM will of course only know about issues which relate to their own equipment. Sourcing of Spare Parts Abtech is also able to source spare parts quickly and at low cost from either stock or from a wide-ranging partner network. For the customer it means extending the life of their existing systems, delaying capital investment in major upgrades, and using incremental upgrades at the lowest possible cost by reviewing the options from multiple vendors rather than just the main OEM. Upgrades When the time comes to refresh your aging hardware and software to cope with new demands, a company like Abtech will have a market for your redundant systems, and will be able to offset part of the cost of the new technology. Proactive Monitoring Although proactive monitoring is available from most OEMs, this will be only a small part of the OEM's operations. A third-party provider will be geared up for active management since this will be an important part of their core business model. They will be able to refine the efficiency of their monitoring operations and pass those savings onto the customer. Because they will be providing proactive services to many different clients with widely differing systems, they are also likely to be more effective than an OEM. This is particularly true where the fault lies in inter-operability, rather than in a specific vendor's equipment. Abtech supports a very wide range of hardware and software, so Abtech will have engineers with work-face experience across the board. Abtech Technologies August 2013 Third Party Maintenance 5

7 Active monitoring is of course not confined to fault and security issue detection. It can also evaluate how, for example, the process and thread scheduling is working, how effective are the memory management algorithms and the efficiency of disk operations. Different operating systems have significantly different algorithms for these functions. Linux based systems use a Completely Fair Scheduler (CFS) algorithm for process scheduling, which is characterised by a round-robin pre-emptive system with dynamic priorities aimed at preventing process or thread CPU starvation. Processes which have been waiting longest for CPU time have their priorities 'raised' (in practice they move from left to right in a process tree). Linux is also fairly easy to configure for optimum performance under specific demands, since configuration files are held as simple text files. Windows systems also have some measure of dynamic priority scheduling, but they concern themselves mainly with raising priorities of IO-bound and interactive processes, compared to CPU-bound processes. This is to help the user get responsive control via mouse, keyboard etc., and to ensure that shared IO peripherals are released as soon as possible. The point here is that the engineers using active monitoring need to be experienced in the fine detail of many different systems in order to be maximally effective. A third-party provider is more likely to have this depth of experience. Conclusion The advantages of third-party support can be summarized as follows: Item Description Lower maintenance costs An independent provider will typically save up to 70% Delay or minimize capital costs Multi-vendor support from a single source. Minimize downtime Independent advice Shorter time to market for new products Extend the life of IT assets and the cost of upgrades Consolidating support across multiple vendors promotes faster fault and bottleneck resolution. Third-party providers will often be more responsive and able to give on-site support 24/7 Truly independent and unbiased analysis not linked to a particular OEM. Resources can be re-allocated to optimise IT capabilities as necessary to fulfil the needs of new products. An OEM may well only recommend new equipment spend. For more information about Abtech Technologies maintenance services, contact us today at or i Kanaracus, Chris. "More ERP users are eyeing third-party support." Computerworld. International Data Group Inc., 8 August Web. 19 August Abtech Technologies August 2013 Third Party Maintenance 6

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