16 Jan Moving from OEM to TPM is the Best Business Decision Your Company Can Make

One of the leading Gartner analysts stated that Gartner has seen very few customers look to move equipment back to Original Equipment Manufacturer (OEM) maintenance once it has been moved to a Third Party Maintenance (TPM) provider due to overall satisfaction and substantial savings with TPMs. [1]

The recent Gartner Market Guide for Data Center and Network Third-Party Hardware Maintenance supports this conclusion.

According to the market guide, the first potential benefit of switching to Third Party Maintenance is:

Direct cost savings —

Hardware maintenance is increasingly being considered “nonstrategic IT” spending, resulting in organizations seeking low-cost alternatives to expensive OEM contracts and pricing. TPM contracts can offer customers 50% to 70% savings off net-OEM support prices. When this is converted to the percentage off of the OEM list, it is even higher. [2] Maintenance is a bulky cost for many organizations and one that they perhaps view as “non-strategic.” The OEM typically has an ever-escalating pricing structure after the initial warranty uplift period, a common tactic used to generate premature refresh cycles. TPMs provide an alternative that will reduce your cost and deliver quality maintenance and support.

In addition to the apparent and significant cost savings of moving post-warranty equipment to TPM, Gartner emphasizes other benefits of TPM including:

Escaping OEM post-warranty maintenance increases —

Customers often switch to TPMs when the original warranty runs out, rather than renew the OEM support contract, at significantly higher OEM post-warranty pricing. [3] When you do business with the OEM, you are just one of hundreds or even thousands of clients, rarely getting personal attention. With TPMs you can customize a solution that works for your exact needs across multiple manufacturers.

Extending the life of IT assets —

Almost all of the installed bases supported by TPMs are post-warranty or after the end of service life (EOSL). This can provide organizations with the flexibility to delay upgrade projects, especially when moving workloads to the cloud. [4] It will help your organization save more money and prepare for future technology upgrades at a pace that fits your business needs.

Flexibility in contract term —

Some enterprises consider the flexibility and customized support from TPMs an advantage over OEM contracts. For example, OEMs will typically not entertain a contract of less than a full year. A TPM, on the other hand, is typically willing to provide a customer with a short-term contract of, for example, nine months (or less). Your first step into TPM does not have to include your entire infrastructure. In fact, Gartner recommends a “Hybrid Approach” to maintenance, one that includes OEM and TPM maintenance. [5] With a “Hybrid Approach” to maintenance, you are taking a safe and smart approach that also delivers the significant cost savings that TPM brings to your organization.

Leverage against an OEM quote —

Not all OEMs are prepared to lower support costs if you threaten to move to a TPM or have a TPM quote in hand. Some will not budge on price, while others will lower their price. [6] Finding that 50% to 75% savings in an unanticipated place will help you set your business up for desirable growth. A huge win for everyone!

Most organizations will significantly benefit from partnering with a third party maintenance provider. According to Gartner, the benefits of third party maintenance services are substantial and should be considered next time your OEM support contract comes up for renewal. [7]

As an IT hardware maintenance and support company, Smart 3rd Party is here to help you with a sensible alternative to costly manufacturer maintenance to support your IT assets beyond their warranty or service agreement. We can offer a customized solution to extend the life cycle of your hardware while protecting your bottom line. Contact us today to find out how we can help your business or call us at 800.583.3894.

[1-7] Gartner Market Guide for Data Center and Network Third-Party Hardware Maintenance, Published 29 August 2019