The Benefits of
Asset Sweating

Extend the useful life of your hardware

Asset sweating allows you to extend the life of your technology equipment and maximize your ROI.

This segment is taken from a recent podcast that delves into the benefits of third-party maintenance (TPM) and how it fits into the concept of a hybrid support solution. View the full podcast here.

Podcast

Watch other segments from our informative podcast, Third-Party Maintenance and the Value of a Hybrid Support Solution, at the links below:


White Paper

Interested in delving further into the concepts of hybrid support and TPM? Download your free guide, The Value of a Hybrid Support Strategy, here.


Learn More

Learn more about how CXtec can help you build a hybrid support solution here.

Find out about CXtec's third-party maintenance offering here.


Resources

Transcription

The chart here shows a typical purchase of a switch. For a switch you pay $50,000, spend about $5,000 on maintenance a year. It depreciates over four or five years and then what happens is the manufacturer announces end of sale, the end of life, the end of support.

And you notice as they get into years six, seven and eight they increase the maintenance. They double the maintenance because they know you already fully depreciated your asset, you have that money available to buy new equipment and they'll push you by penalizing you through increased maintenance cost.

Now they've increased your maintenance cost but you're no longer getting any support from a software perspective. You're only getting hardware replacement. So they've doubled the cost of your maintenance and you've actually gotten significantly less for your dollar.

This specific example was at a Gartner conference: a major bank had 1200 switches. It was a 6509 switch, 1200 of them and they were end of support. They talked to Cisco, Cisco would give them a one time disposition of, hey we'll extend SmartNet for those for one year if you pay $12,000,000 in support plus guarantee us, through a written contract, that you will invest in the next class which is the Nexus switch. The outlay was over $100,000,000 in CAPEX.

Now the procurement team, the IT team, got super upset. They started shopping around and they found a third-party maintenance vendor that would support that network for the life of the equipment for $750,000 a year for as long as they need to. And they have the same technical assets that Cisco has. The same kind of CCIEs on staff, the same credentials, all of that.

Now think there. $12,000,000 a year versus $750,000 a year or the capital avoidance of not having to spend $100,000,000 on just your core stuff. This is not some edge play, this is mainframe stuff here right in the heart of the company's network that they would now have on third-party maintenance and they're super pleased about it.