Cost trap: service contracts for data centers
6. November 2018

Business experts believe a company will only survive for a couple of days if its complete IT infrastructure goes down. After which SMEs will hardly be able to avoid going bankrupt. Yet German companies do not pay that much attention to the maintenance of their IT infrastructure: Only 15 percent check the conditions of their service contracts once a year, 54 percent at least once every two years – and 30 percent only after an indefinite period. “German companies are poorly prepared for hardware incidents in terms of IT. While concepts such as Industry 4.0 or Big Data defined the IT decision makers’ agenda, the IT infrastructure in most companies is not sufficiently protected,” comments Dr. Ralf Dingeldein. The CEO of Technogroup, one of the leading providers of third-party maintenance (TPM), has just published the “Report Server Maintenance 2018,” for which 100 representatives of SMEs were polled.

Hardware: Often irreplaceable

Above all, small and medium-sized enterprises rely for many years on their server and data center hardware. Only five percent of the companies use the equipment for a maximum of five years, with 34 percent, by contrast, utilizing it for up to seven years. A total of 47 percent of the companies have designed their data centers to run for ten or more years. “Such equipment requires customized service if downtime is to be minimized in the event of a fault. However, the manufacturers themselves are hardly geared to ensuring the preservation of these hardware generations,” says Ralf Dingeldein. For this reason, 47 percent of clients are also not satisfied with the manufacturer service packages and a mere 18 percent are very satisfied. Technogroup takes a different approach by providing special service contracts that are perfectly aligned to the hardware being used, independent of the manufacturer or desired new purchases.

Cost surge

67 percent of corporations surveyed as part of the Technogroup study even urgently require their existing systems for software systems (ERP, CRM, etc.) that cannot be migrated to new platforms. Only 34 percent of the companies polled are already collaborating with a third-party maintenance provider, while 38 percent resort to individual service contracts with manufacturers. A lot of cash goes into procuring the service – likewise 38 percent of firms commit as much as 40 percent of their overall IT budgets simply for maintenance. A total of 27 percent allocate as much as 30 percent, and 19 percent up to 20 percent. Third-party maintenance offers immense cost-cutting potential, or so a study by analysts at Gartner showed: Savings of up to 60 percent are possible in this growth market, so the experts say, as third-party maintenance better fits the needs of data centers.