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What is the Value of Maintenance Agreements?

TG_Leadership_KenZimmer03_1000x1000_v2Ken Zimmer
Director of Sales
Trivalent Group, Inc.

As Trivalent’s Director of Sales, I am constantly meeting and talking with clients and looking for ways to provide them with value.  Therefore, it is my job to provide them with the best and most useful information that I can based much on what I see in the industry having been in this type of role for 16+ years.  One of the most regular questions clients ask me is: “Do I need to renew this maintenance agreement, and, if so, WHY?”

The answer to this question is not always an easy one.  In a sales role, it would be easy to just say “yes” and roll in the orders.  That is, however, not the right thing to do.  Rather, it is important to weigh what the maintenance agreement is for, what it brings the client in terms of value, and whether it is worth the financial impact that it makes on the client.

Truth be told, in IT, nearly everything you purchase has some sort of maintenance agreement that goes along with it, from your antivirus to your backup hardware/software to your firewalls, routers, switches, etc. In some instances, looking out for the best interests of our clients means giving the best information possible and having them let you know what risk they are willing to take.  I hate to say it, but some maintenance renewals are a lot like insurance.  It all comes down to the risk versus cost multiplied by probability.

My honest opinion is that, first and foremost, you need to make sure that you are covered regarding things that protect you on the security side of things.  A firewall ultimately is the lock on your door.  If you don’t keep the lock on your door updated, how useful is it?  This goes for antivirus and malware products as well.  They are only as good as their last update, and you want to make sure you are able to get the newest updates and releases.  With viruses and ransomware flying around on a daily basis with so many different variations, I look at it as a very short-sighted thought not to renew this type of maintenance renewal.

Next, we look at maintenance from software vendors such as Microsoft.  Where is the value in this?  Well, if you like to keep current on your software and not fall behind, it is worth a look.  Microsoft, for example, offers many programs to give you a solid means to stay current.  They often will cost a little more up front but in the long term will save the client money.  Microsoft also releases new operating systems and releases very regularly.  Many times, the next version is out within the timeframe that the maintenance or contract falls under.

VMware is a horse of a different color when it comes to maintenance.  Because many clients are depending on the software layer of VMware to run mission-critical servers, I believe this one to be very important.  It gives you not only software upgrade rights, but also technical support.  When we are talking about your main systems and your livelihood, I say don’t mess with it.  One issue without support and you will be kicking yourself.

Let’s talk hardware.  Again, this is an area where the costs and benefits really need to be weighed out by the client.  I cannot tell them whether or not to purchase maintenance.  They know the cost of downtime within their organization much better than I do.  The way that I look at it is if it is a SAN or something that is a bit of an axis for the data in the organization, don’t even think twice about it.  A roll of the dice on this can literally put your company out of commission for a long time and can be devastating.  If the server hardware runs mission-critical applications, this needs to be considered.

I will tell you that, from a manufacturer perspective, if you have a server that is over three years old without a maintenance agreement on it and you have a failure, you are kind of like fish in a barrel.  The cost of components is much more after the original agreement expires.  The time to get those components may also be much longer as well, resulting in even more downtime.

Another thing to take into consideration regarding hardware is what many manufacturers label a “lifetime warranty.”  Be sure to understand what “lifetime warranty” means.  All lifetime warranties are not the same, believe it or not.  Some are what I truly would consider “lifetime.” As for the others, if manufacturers consider them “lifetime,” I hope that is not how my personal lifetime is measured, or else I have a ton of stuff to do on my bucket list in a short period of time.  In all honesty, do not be afraid to ask the questions of what “lifetime warranty” means for each program.  There can be huge deltas that can cost your company lots of dollars or downtime in the future.

I am sure you are asking, “What about third party warranties?”  Well, I am glad you asked.   There are many third party companies out there that offer third party warranties.  Buyer beware!  Many of them are not that great, and, when you need to access parts, etc., they often create more headaches than they are worth.  We at Trivalent have relationships with reputable partners such as Service Express, Inc., which runs a wonderful business where the client is #1 and they do it the right way.  Unless the company that is representing a third party warranty is the caliber of Service Express, use great caution.

Having been in this industry for the amount of time that I have and working at a company that has roots dating back to 1971, we have seen, heard, and experienced much of what I have written about above.  We do strive to provide the most insightful view on things such as maintenance agreements and are happy to discuss the ins and outs of this all-important question of “What is the value of maintenance agreements?”

  • Chris Clos

    It’s starts a tough balance. Couldn’t agree more though. It all depends on how much the company depends on the hardware (play on words on purpose). If it’s test or dev, can you live without it until it’s replaced? Do you have spare equipment? How much does the downtime cost you?