When you purchase a new piece of hardware for your business, you are likely to consider adding a service level agreement to ensure the uptime, availability, and maintenance of your new hardware. Buy a new router from Juniper and Juniper wants to sell you an SLA. Purchase a new secure processor from Brocade, and the SLA question comes up again.
Let the buyer beware. - Proverbs
The OEM Premium
Before you buy an SLA from an OEM, there are a few things to consider. First, understand that there is a premium associated with purchasing support from a well-known OEM. In many cases, OEM’s outsource much of their support services yet still, charge a premium price for the credibility associated with their name.
Since OEMs are in the business of building and selling equipment, there is an inherent disadvantage to having their top resources answering technical support calls and fixing existing hardware. It is more advantageous (i.e., profitable) to replace malfunctioning equipment than it is to troubleshoot, repair, and replace your current equipment.
Replacement hardware used to fulfill the terms of an SLA administered by an OEM is taken from their existing inventory. This inventory is comprised of hardware that was previously found to be defective and was refurbished. Replacement hardware provided by OEMs has a DOA (dead on arrival) rate that is significantly higher than the industry average of 2 percent. High-quality support providers who routinely test replacement hardware provide DOA rates that are much lower, closer to 0.5 percent. In addition, if the OEM inventory is not used to fulfill SLA requirements, it will be sold. These factors should lower the cost of an OEM SLA to their clients, but it does not.
Risk comes from not knowing what you are doing. – Warren Buffett
Too Much Coverage
OEM-administered SLAs provide limited customization options. For example, your business may require 24-hour technical support and next day hardware replacement. However, it is common for OEM-administered SLAs to only offer 24-hour technical support with four-hour hardware replacement agreements. This means that the business is paying a premium for unnecessarily fast hardware replacement just to obtain the technical support it needs.
There is little education to the client on their existing coverage. An existing SLA may provide the coverage needed to support the business needs, such as next-day hardware replacement. However, there is no mechanism in-place that alerts the client of this coverage before a new SLA, which provides the same coverage, is purchased.
Another common cause of over-coverage is unutilized entitlements. Entitled support is the coverage that is included in the purchase of new equipment, for the life of the equipment. Businesses may rely on internal technical support and spares to support uptime but purchase a software SLA to write and script patches, resolve security vulnerabilities, and implement bug fixes without realizing that this support is provided in their entitled services.
Finally, when equipment is retired, OEM-administered SLAs do not allow for refunds. While the SLA can be canceled by the client at any time the balance of the contract is still due. The only way to utilize the remaining funds is to upgrade the current coverage on an existing SLA or upgrade a device type. Since OEM SLAs are only sold in one-year increments, this can lead to agreements that are still costing the business money after exceeding their useful date.
If you have integrity, nothing else matters. If you do not have integrity, nothing else matters. – Alan K. Simpson
No Notice of Non-Coverage
Support level agreements are influenced by OEM-determined milestones. A device may reach an end-of-support date during the SLA period. After this date, the OEM will not provide any type support for the equipment, even with an SLA in place. A three-year SLA may promise software support for the term of the agreement. However, if the end-of-support date is reached during that term, no bug fixes or OEM support will be provided, and again, there are no refunds.
While hardware manufacturers are required to notify purchasers of milestone dates, these notifications do not explicitly state their impact on existing SLAs or your business. It is up to the client to manage OEM milestone dates and coordinate SLA purchases that optimize coverage. Often, clients do not realize that a resource has reached an end-of-support milestone until support is needed. This leaves the client scrambling to solve immediate business needs while juggling a new resource acquisition.
I do not subscribe to the thesis, “Let the buyer beware.” I prefer the disregarded one that goes, “Let the seller be honest.” – Isaac Asimov
Whether equipment is purchased directly from an OEM or from an authorized dealer, there is little education to the client on existing SLAs, entitled services, and milestone dates. To guard against overspends and coverage lapses, maintain a centralized support agreement database that tracks each resource to the business needs and relevant SLAs and entitled services. Also, look for support partners that offer flexible contract terms, client education, robust metric tracking, and proactive support philosophies.