The growth and advancement of the IT industry have generally been driven by the obsolescence of technology. Rapid innovation is also shortening technological lifecycles.
And around every emerging technology, original equipment manufacturers (OEMs) would build up high levels of hype to encourage adoption, migration or upgrade. After all, the OEM’s primary goal is to sell new equipment, not to maintain older ones.
Selecting and deploying the right technology at the right time will be critical for CIOs seeking to spend wisely or lower cost.
In IT infrastructure management, for instance, many organizations often find network equipment working well beyond their technological life. This becomes an issue when the equipment is not supported by required software or components until the end of its lifecycle.
Regardless, CIOs must prioritize spending; they cannot keep up with all technology refreshes at once. Hence, they must first debunk a couple of myths on using the latest and greatest network equipment.
The 5-year technology refresh myth
In a Forrester study, 79% of respondents say they refresh their wired network infrastructure every 3 to 5 years, guided by industry averages that originate from OEMs.
Separately, research by Gartner found that the useful life of most network equipment is closer to 7 to 10 years. Forrester also supports this finding.
The Forrester study further points out that while equipment upgrades were predominantly driven by new functionality requirements, 56% of IT decision makers were influenced by the industry average refresh cycles of their peers, and 85% of them would have kept at least 10% of their existing equipment if the OEM continued to support them.
Nonetheless, organizations should dismiss the fear about network equipment failing after three years. New network hardware, such as fixed form-factor switches, is designed with average mean time between failures (MTBFs) of 200,000 hours or more. This translates to roughly 20-plus years.
The OEM maintenance myth
Increasing MTBFs mean that accelerated refresh cycles will cause unnecessary capital expenditures (CAPEX). Lacking awareness of alternatives to OEM support, a majority of businesses continue to believe that their equipment has to be upgraded once the OEM stops supporting it.
For example, some businesses believe that a Cisco SMARTnet maintenance contract must be in effect for devices to have access to the Cisco IOS software updates. The reality is that 40% to 60% of a Cisco network does not require SMARTnet to get the IOS updates.
According to Forrester, over 80% of organizations buy maintenance contracts from their OEM manufacturer, even though they see little value in purchasing them. But only 21% of respondents leveraged third-party service and maintenance contracts, while 80% wanted to if there’s cost savings.
The End of Life process
To debunk these myths, consider the CAPEX and operational expenditure (OPEX) implications in a product’s End of Life (EoL) process.
An organization’s CAPEX could be buying new equipment or carrying out a complete network upgrade. These purchases would be supported by an OEM maintenance contract – an OPEX.
The cost of that contract is typically about 10% to 20% of the average equipment purchase price per year. A Cisco SMARTnet contract, for example, provides IOS updates, technical assistance center and software support, and hardware replacement.
The OEM’s EoL policies provide guidance, such as equipment availability, access to software, and last date of support. A product’s End of Sale date usually comes 5 years after the product announcement. The product is no longer available for purchase through OEM channels after this date.
The next significant milestone is the End of Software Release date. This is when the OEM ceases to develop, maintain or release software maintenance updates and bug fixes for the product.
Finally, the Last Date of Support marks the end of all support for the product, making it obsolete from the OEM’s perspective. Organizations unaware of their options to support an EoL product would be forced to upgrade to new equipment.
But there are affordable alternatives to OEM maintenance like Curvature’s NetSure Maintenance Program, which offers protection and support for products that have been declared EoL by OEMs.
What smart CIOs do
Faced with these strategic choices, smart CIOs recognize the value in sweating current assets. They keep what’s working within the existing network to avoid premature and unnecessary upgrades.
Secondly, they don’t pay for software updates if they are no longer available or if they are available for free. This requires careful scrutiny of ongoing maintenance contracts for OPEX savings.
Better still, they put maintenance contracts out for bids, not just to different resellers, but also to third-party suppliers who provide sound alternatives to OEM-driven contracts.
These insights allow CIOs to determine equipment to upgrade and existing equipment that can be left in place, delaying significant CAPEX. According to Forrester, up to 43% of technology refreshes are the result of forced OEM upgrades. Alternative maintenance strategies also allow CIOs to lower maintenance cost.
So, what CIOs need is an understanding of the EoL process and of the value of alternative maintenance strategies.
“IT decision makers are becoming more familiar with the issue, with Gartner and Forrester researching and bringing attention to it,” says Glenn Fassett, general manager for Asia Pacific and EMEA at Curvature. “The more IT decision makers understand just how big of a problem forced upgrades are, the more willing they will be to explore alternatives and solutions, which is what our Netsure Maintenance Program does.”
“This is not just a matter of saving some money on your maintenance,” Fassett adds. “It’s a matter of enabling projects and prioritizing IT spending. It’s really a strategic view of how to run your IT smarter and more efficiently.”