TPM: A Money-Printing Machine

A lot of third-party maintenance (TPM) vendors use a great deal of hype and exaggeration. They’re trying to get your attention using the one concept we all seem to be able to agree upon - we all either need to save money or we need to spend less money. Well of course we do! But there's more to the TPM story than just that.

  • Jun 30, 2020
  • TPM, third-party maintenance

 

By Peter McCarthy | CXtec Business Development Manager - TPM


Third Party Maintenance: A Money-Printing Machine

money printing
Based on what hits your inbox about TPM (third-party maintenance) every day, it would be fair for you to assume that TPM is some type of magical money-printing machine. It seems like the only benefit of TPM for you is "huge savings," "enormous savings," or "incredible savings."

You may not even now what the acronym TPM stands for and you probably know what I am talking about. All you know from glancing at these e-mails is that something the OEM sells you is expensive and these TPM people sell it so cheaply that it may just help you print money.

I'm being facetious of course, but I’m hoping to make a simple point. A lot of TPM vendors use a great deal of hype and exaggeration. They’re trying to get your attention using the one concept we all seem to be able to agree upon - we all either need to save money or we need to spend less money. Well of course we do!

The OEM Cycle

The OEM IT hardware life cycleSaving money is something that TPM can help you do, and some would argue that this is its most salient benefit. But it’s also an easy to understand benefit because of the nature of what it replaces: OEM hardware maintenance.

OEM hardware maintenance is priced with graduate school economics theory behind it. It is part of a long-term strategic plan to get you to consume on the producer's timeline for extended periods of time instead of investing at a pace you choose.

OEM hardware maintenance increases in cost over time to make the prospect of buying new hardware look more cost effective. The OEMs know how businesses and organizations budget and handle their finances, focusing on the fact that someone will identify increased spend to maintain older hardware which will be called out in terms of spend effectiveness. Once that happens, the selling process for new hardware begins.

 

Breaking the Cycle

TPM breaks that cycle in two ways. First, is that TPM is by definition "third-party" meaning it is an offering that is independent of your OEM (or OEM agent or reseller). As a third party, a TPM is not aligned to the OEM's strategic life cycle plan.

Part of the OEM's strategic life cycle plan is to publish milestone dates announcing end of sale, end of software maintenance, end of new maintenance contract bookings, and ultimately end of life. OEM agents and resellers have to honor those dates in order to be an OEM partner. TPMs can continue to offer hardware maintenance based on market availability of replacement product, which in most cases far outlasts the manufacturer's arbitrary published dates.

The second way is that the overselling, overconsumption, and premature disposal of IT infrastructure creates a vast supply chain of high-quality, low-cost replacement parts and units. If end users held on to their gear a lot longer, TPM would not be economically viable. This overselling creates a very large value proposition for the end user that wants to hang on to their gear much longer.

That is the true "magic" of TPM - turning the consumption engine in on itself and using it to your own benefit. You are consuming the thrown away value that other users have abandoned, those who have succumbed to the OEM master plan.

 

A Better Plan

At CXtec, our RapidCare® TPM offering helps you to take advantage of this quirk in the market. We source high-quality replacement parts and whole units from end users who no longer need them.

We run them through rigorous quality checking and testing. We do not repair anything we bring in - we don't have to. If something we buy from an end user doesn't work, we don't pay them for it and we recycle it responsibly on their behalf.

We maintain stock in our warehouses of all popular infrastructure devices, either for use as purchases by end users or for maintenance for our RapidCare users. Our deep levels of high-quality replacement units and parts make us a leader in the industry, to the point where other providers in our industry buy parts from us.


The Real Magic

We don't magically help you print money so that you have more to spend. We help you to spend your maintenance dollar much more wisely by taking advantage of what was described above.

The net result is the same, but we hope this message helps you understand it all a bit better so that we can partner with you to help you do what thousands of other RapidCare customers have done in the forty plus years that CXtec has been in business.

 

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