IT costs are rising across the board, from hardware to official technical support. With economic uncertainty putting IT budgets under greater scrutiny, businesses are looking for ways to optimize their infrastructure while keeping costs under control. Third-party maintenance is steadily emerging as a cost-effective alternative to OEM support. But can TPM really save you money, and how?
Our Third-Party Maintenance cost guide breaks down where independent IT infrastructure support can reduce both long-term and short-term costs, with a side-by-side comparison of third-party and OEM support to help you make an informed decision for your IT budget.
Why are business IT budgets under pressure?
Operating in an increasingly unpredictable environment is driving businesses across the world to take a more cautious approach to IT spending and investment, in what Gartner has called the uncertainty pause.
Meanwhile, expensive and rigid OEM support contract renewals after a product’s warranty have long been a source of overspending for businesses. This is just one of the reasons Third-party maintenance is becoming an increasingly popular alternative.
Third-party maintenance refers to independent IT hardware support and maintenance services, provided by a company that is not the asset’s manufacturer.
Third-party maintenance can have a direct financial impact on not just maintenance fees, but on the entire IT lifecycle.
What factors affect Third-Party Maintenance pricing?
Drivers affecting the final price of your third-party maintenance agreement will include:
| Cost factor | Why it affects TPM cost |
|---|---|
| Number of assets | More equipment generally increases the scope of support |
| Equipment type | Servers, storage and network equipment have different support requirements |
| Equipment age/status | EOSL equipment may require different parts and support strategies |
| Criticality | Business-critical systems may require faster response and 24/7 coverage |
| SLA | Faster response times generally require a higher service level |
| Location | Geographically dispersed sites can affect on-site support requirements |
| Contract length | Longer agreements can offer greater cost predictability and efficiency |
How much can you save with Third-Party Maintenance?
Outsourcing support to an independent vendor can significantly reduce an organization’s IT maintenance expenses. Gartner estimated in its 2019 Market Guide for Data Center and Network Third-Party Hardware Maintenance that by choosing a Third-Party Maintenance provider over an OEM support renewal contract, businesses can save up to 70% on maintenance costs while receiving the same level of service.
Third-party maintenance can save businesses costs both directly and indirectly. Let’s take a look at the key examples of both types:
Direct savings
- Lower maintenance service fees can reduce ongoing support expenditure.
- Instead of juggling multiple support agreements, consolidating support for multi-vendor equipment under one global contract can reduce both cost and complexity.
- Tailored, flexible SLAs allow businesses to align support levels with their operational requirements and avoid paying for unnecessary coverage.
Indirect savings
- Extending the support life of existing hardware avoids premature refreshes and the costly downtime associated with hardware swaps and data migrations, and reduces the frequency of acquisition CAPEX.
- Effective maintenance can reduce the duration and frequency of performance issues, failures and the downtime they cause, limiting operational disruption and lost productivity.
- Outsourcing maintenance can reduce the internal resources required to coordinate support, spare part replacements and repairs.
- Maintaining functional legacy equipment can extract greater value from assets before replacement, increasing your ROI.
To discover other ways to get the most out of your IT investments, check out our IT budget optimization guide.
Protect your IT infrastructure without breaking the bank
Discover Evernex’s independent, on-demand third-party maintenance services. We support multi-vendor environments, legacy systems and AI data center infrastructures. Find out more on our service page!
What are TPM’s main pricing models?
Third-party hardware maintenance pricing models can vary depending on the vendor and the client’s needs. However, the most common models are:
- Per device
- Per SLA bracket
- Per bundle
See below for a deeper explanation of how each model works.
Per device
In the per-asset cost model, support is priced according to each individual piece of equipment covered.
Devices such as servers, switches, routers and storage systems are assessed separately, with the final price reflecting the equipment and level of service required.
Pricing can depend on factors such as:
- Equipment type and model: The specific hardware being supported and its configuration.
- Contract term: The duration of the maintenance agreement.
- Service level: The agreed SLA conditions, including support coverage and response times.
- Parts coverage: Whether the agreement covers labor only or includes parts and replacement components.
- Device criticality: Production or mission-critical systems often warrant higher service levels than redundant or backup equipment, affecting the final cost.
Per SLA bracket
Unlike many OEMs, third-party maintenance providers offer customized maintenance plans that cater to a company’s specific needs. This makes it possible for a business to choose the level of support that aligns with their budget and specific requirements.
For example, here are the coverage and response time options Evernex offers:
| SLA coverage options | SLA response time options |
|---|---|
| 24×7 | 4h |
| 13×5 | Next business day |
| 9×5 | Next 5 days |
While flexible SLAs can reduce overall costs, it also means the final price will largely depend heavily on the features selected: faster service, for example, may equal a higher cost.
Per bundle
For companies managing large, diverse IT infrastructures, bundled maintenance plans may be a simpler and potentially more cost-effective support structure.
Rather than pricing each asset separately, the provider covers a defined group of systems, an environment or an entire site under a single contract and agreed price.
This can streamline administration and procurement, while giving businesses a clearer view of their overall maintenance spend.
How does IT parts availability affect my business costs?
The availability of replacement parts or devices can have a direct impact on the cost of maintaining IT infrastructure.
Sourcing rare spare parts, or parts which are unavailable locally, can present a considerable challenge. This may increase the cost of the item, as well as any wait time. If the system is suffering downtime, extended waiting for a component to arrive can cause elevated revenue losses.
This is why third-party support vendors with a wide, globally available stock of legacy spare parts are crucial to helping businesses save costs. Fast access to replacement components helps extend the useful life of older equipment, reducing the need for expensive hardware refreshes and the associated CAPEX.
The impact of choosing refurbished
Refurbished components can provide a more cost-effective option than brand-new when components need to be replaced, while readily available spares that don’t rely on manufacturing supply chains can help minimize downtime and the costs that come with lost productivity.
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How long do Third-Party Maintenance contracts normally last?
Third-Party Maintenance contracts can range from on-demand support to multi-year agreements, although one-year contracts with annual renewal are common.
Most frequently, Third-Party Maintenance support contracts have a one-year duration and often offer annual renewal. However, terms of other frequencies, such as 3, 6 or 24 months are also widely available. Businesses with larger IT infrastructures or longer lifecycle plans also often use three-year agreements.
Evernex’s flexible, on-demand business model has no minimum contract duration, allowing companies to avoid lock-ins.
What if I have international or distributed infrastructures?
Global TPM providers such as Evernex leverage global networks of trained engineers. This means they are able to support infrastructures across the world, even in remote locations.
On a financial level, this reduces costs for businesses.
While OEMs often insist on a contract per country where a client has infrastructure needing support, third-party maintenance agreements tend to consolidate them into one global contract.
This saves both administrative burden and the accumulated expenses of multiple smaller contracts, a significant hidden cost of managing complex infrastructures.
A reputable third-party maintenance vendor should not only be able to fully support infrastructures in different regions or countries, but also ensure that their processes remain consistent and reliable across those regions.
How to optimise your Third-Party Maintenance costs
Once an organization has selected the right provider, it should align support with its budget goals for maximum cost efficiency. Here’s a few best practices to help you do just that:
Match your SLA to the criticality of each system
Not every asset requires 24×7 coverage or the fastest possible response time. Aligning service levels with business criticality can help avoid paying for unnecessary support.
Leverage asset management
Use your provider’s asset management services to improve overall visibility into your IT inventory. This will help identify underused or redundant assets for consolidation and optimize how existing equipment is allocated.
Proactive monitoring
Use proactive monitoring to identify potential hardware issues before they lead to operational disruption. Detecting and addressing issues early can help reduce the costs associated with failures, unplanned downtime and lost productivity.
Build an IT lifecycle management strategy
Work with your third-party support provider to develop a long-term IT lifecycle management plan that aligns maintenance and replacement decisions with business priorities and budgets. A structured lifecycle strategy can avoid unnecessary capital expenditure by ensuring support and replacement costs are planned and controlled.
Evernex provides comprehensive services including IT lifecycle management (IMACD), diagnostics and repairs, part replacements with Spare-as-a-ServiceTM, and IT Asset Disposal services.
Our expert TPM can extend your hardware’s lifecycle well beyond its End-of-Service-Life date. To check your equipment’s status and plan your next steps, visit our EOSL database.
How to estimate your Third-Party Maintenance budget: general framework
Your exact Third-Party Maintenance costs will depend on your IT architecture and its specific requirements. However, costs are generally determined by the following factors:
- Assets covered
- Support requirements
- Service level
- Coverage requirements
- Estimated initial contract length
- Additional services
Checklist: What information do I need to get a TPM quote?
To help with cost estimations, ensure to have this information ready:
| Factor | Ready? |
|---|---|
| Brand/OEM of each device | 🟩 |
| Asset configurations | 🟩 |
| Number of assets | 🟩 |
| Model numbers | 🟩 |
| Support statuses (in warranty, EOL, EOSL, etc.) | 🟩 |
| Site locations | 🟩 |
| Mission criticality of each device | 🟩 |
| Initial idea of response time and coverage window requirements | 🟩 |
| Estimated initial contract length | 🟩 |
Controlling your IT costs doesn’t have to be such a struggle. If you think it’s time for an expert, impartial and free assessment, get in touch with Evernex now to find out how much you could save with Third-Party Maintenance.
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FAQ
How is Third-party Maintenance priced?
Third-Party maintenance can be priced per device, per bundle or by SLA bracket. Final pricing depends on a range of factors, including the brand, model and age of each asset, the number of devices to be supported, service level requirements, and the contract scope and duration.
Is TPM always cheaper than OEM support?
Not necessarily. Official manufacturer support may be included during warranty, making it a more cost-effective option during this time period. However, Third-Party Maintenance is often far more cost-effective than OEM support renewals after a device’s warranty ends, saving companies up to 70% in maintenance fees.
Does a faster SLA increase cost?
Normally, yes. 24×7 coverage and faster response times can increase the cost of an SLA, although they can be valuable for mission-critical systems where uptime is pivotal. For lower-priority systems, businesses can reduce costs by opting for longer response windows or more limited coverage.
What should be compared in an OEM-versus-TPM quote?
The price is an important factor, but not the only one. Compare key factors such as geographic coverage, SLA response times, and service flexibility for a more complete picture. For businesses with international or distributed infrastructures, it is also worth verifying if one contract can cover infrastructure across multiple countries or separate agreements are required for each territory.