Why refresh? Featured

7:00pm EDT January 26, 2009

With technology changing on an almost daily basis, it can be tough to stay on top of it all. Often, you install new data center hardware equipment and soon thereafter that equipment comes out with a new version.

Not only that, even simple updates can become time-consuming and expensive when dealing with the original equipment manufacturer (OEM). That’s why, for many businesses, choosing an independent service organization (ISO) as a supplier over the OEM makes financial sense, particularly in tough economic times.

“ISOs can offer a lower-priced model because they don’t have the overhead that OEMs have,” says Amy Lombardo, marketing manager for Park Place International. “As a result, ISOs can offer premium service without compromising quality.”

ISOs need to stay abreast with current trends, whether they are financial stresses, technology changes or new competition. Therefore, says Lombardo, they prove that they understand current environments and can work to solve your business concerns.

Smart Business spoke to Lombardo about why it makes sense to partner with an ISO in any economy, especially a troubled one.

How has the current economy affected the way companies view ISOs?

In the past, many companies wouldn’t consider an ISO because they were on a strict refresh cycle of buying new equipment through the OEM once the initial warranty period expired. Now, companies are more willing to talk to an ISO because they need a different option or an ISO’s appeal makes more sense in light of the economy. High capital reduction is a big issue and companies are trying to figure out how to extend the life of their equipment. As we enter 2009, many companies are feeling pressure to reduce IT budgets. If an ISO can offer a service contract at 40 to 55 percent off OEM list price, it can help a company reach those budget benchmarks by offering lower-priced models.

What incentives or special offerings can ISOs offer to entice companies away from OEMs?

Partnering with an ISO will obviously save you money, but companies are often looking for more, especially these days. An ISO isn’t selling you a tangible product, so it’s not like they can offer you a ‘buy one, get one free’ kind of promotion. But, what they can do is work with you so you have the services you need, at terms you can handle.

For instance, an ISO may offer you a free month of service if you’re able to provide it with a list of your equipment upfront. Or, say you’re at the end of your calendar or fiscal year and you have depleted your budget but are in need of service. An ISO may offer you 14 months of service for the price of 12. So, you’ll get the service you need, without having to pay right away. Again, this provides cost savings, but it also offers peace of mind. If you try to service equipment yourself or have the OEM do it after your contract is expired, you’re going to run into potential downtime and huge bills. Having a contract offers savings over having problems serviced on a case-by-case basis.

What should a company look for in an ISO?

ISOs are ‘service organizations,’ which means they are addressing how to help service a customer and be a solution provider, while addressing pain points and building trusted relationships. Here are some key things to look for in a good ISO:

  • An ISO should always stay focused on its core competence of offering superior service at a lower-priced model. You’ll want an ISO that offers simplified billing and multi-vendor maintenance with the ‘one throat to choke’ philosophy — simply meaning you can make one phone call for all of your platform maintenance needs.
  • Companies that are on a refresh cycle may not realize that an ISO maintenance contract can provide cost savings, which can be used toward other investments. On the other side, some cash-strapped companies may choose to self-maintain to avoid new equipment costs. The right option is to find the happy medium, and an ISO can help when you don’t have the budget to buy new, but, at the same time, don’t want to worry about self-servicing. When you self-service equipment, access to parts can be quite expensive and timely. Even a small downtime can lead to catastrophic results. A good ISO will find the perfect balance between buying new and self-servicing.
  • You want an ISO that stays current. The biggest things that affect ISOs are constantly changing technologies and growing trends such as consolidation and virtualization. Messaging needs to keep up with technology changes, and moreover, ISOs need to ensure that engineers are constantly trained and updated on all equipment lines
  • Make sure a prospective ISO proves the savings it’s offering. ISOs don’t have the overhead expenses that OEMs have, like research, development and manufacturing costs. An ISO’s value proposition is selling service that’s of OEM quality or better, at a lower cost. ISOs focus on service; OEMs focus on selling hardware and software.
  • Finally, find an ISO you truly trust. Making a change from an OEM is a big decision, so, again, make sure your ISO proves and delivers its value and experience. Get references and partner with an ISO that will conduct onsite audits and work with you on your main business issues. If you find an ISO to do all that, it will become a valuable and trusted business partner for years.
  • AMY LOMBARDO is the marketing manager for Park Place International. Reach her at amy_lombardo@parkplaceintl.com or (800) 931-3366.