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Take Back Control: “Reduce Networking/Infrastructure Cost With Multi-Vendor Equipment and Support Strategies”
The document discusses strategies for reducing networking and infrastructure costs using multi-vendor equipment and third-party maintenance support rather than relying solely on OEMs. It highlights the financial implications of forced upgrades and maintenance contracts, advocating for extending the life of existing hardware and making strategic capex and opex choices. Several case studies demonstrate significant savings achieved through these approaches across various organizations.
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Take Back Control: “Reduce Networking/Infrastructure Cost With Multi-Vendor Equipment and Support Strategies”
- 1. Jeff Zanardi November 2015 TakeBack Control: “Reduce Networking/Infrastructure Cost With Multi-Vendor Equipment and Support Strategies”
- 2. Introduction © Curvature LLC I’mnot going to try and sell you anything today. My purpose is to share insights with you based on independent research from Gartner, and others. The insights focus on strategic choices within IT: – Hardware refresh cycles (CAPEX spend) – Maintenance strategies (OPEX spend)
- 3. It’s A ComplexWorld Does this look like you? OEM’s and VAR’s pounding at your door? This “Transformational IT”… who is going to pay for it? © Curvature LLC
- 4. © Curvature LLC 80 20 65 35 Bi-modalIT Shifting budget from Stability to Innovation Requires a more informed design and support model to achieve balance Transformation is Imperative
- 5. © Curvature LLC Insights •OEM’s depend on continuous CapEx expenditures (every 3-5 years) – Escalating maintenance costs – End Of Support • OEM’s force upgrades! • 3-5 year upgrade cycle is arbitrary (and wrong) • Software is not nearly as big a concern as the OEM’s would have you believe
- 6. LETS LOOK ATCISCO AND EMC
- 7. -80 % DON’TKNOW ALTERNATIVES TO OEM SUPPORT Nick Lippis in The Lippis Report 203 expects Cisco 6509 could and should be in service in 2025... - 79 % REFRESH 3-5 YRS - 85 % WOULD KEEP LEGACY EQUIPMENT THE 5 YEAR MYTH - USEFUL LIFE - 7 TO 10 YRS Cisco
- 8. -50% OF THENETWORK DOESN’T NEED OEM SUPPORT CONTRACT FOR UPDATES -EVEN WHEN AVAILABLE, UPDATES ARE INFREQUENTLY APPLIED -SOFTWARE IS AVAILABLE A LA CARTE THE SOFTWARE UPDATES MYTH Cisco
- 9. 3-5 yrs (avg) C o s t TimeLast date of Support End of Sale End of SW Rel. IOS Update TAC/Software Support Hardware Replace OEM Support contract (OpEx) Hardware/Tech Refresh Purchase (CapEx) © Curvature LLC CISCO
- 10. Hardware/Tech Refresh Purchase (CapEx) 3-5 yrs(avg) C o s t Time Last date of Support End of Sale End of SW Rel. IOS Update TAC/Software Support Hardware Replace OEM Support contract (OpEx) -Don’t throw away what is working -Use third party maintenance support Insights -Don’t pay for free SW -Don’t pay for N/A SW -Prioritize your IT investments Curvature Support Equipment Lower Cost Waste Double Pay Waste NA Forced © Curvature LLC Savings
- 11. EMC ©2015 Curvature LLC UpgradeExpected Year4 No more support available. You must upgrade. Year 1 $3M Capex purchase Year 3Year 2 Support Contract The Next $3M+ Capex purchase $750K Opex to extend support for 1 year
- 12. Year 1 Year3Year 2 $3M Capex purchase Support Contract Avoid Capex and Opex waste with 3rd party maintenance UpgradeExpected Buy $250K TPM contract Curvature Support Equipment Lower Cost Savings Insights: - Extend the life of your storage - Don’t throw away what works - Use 3rd Party maintenance
- 13. Make a strategicchoice to go from CapEx waste… ©2015 Curvature LLC f 3-5 years g Software/ firmware Update TAC/Software Support HardwareReplace • Refreshing every 3-5 years • OEM support on everything OEM maintenance costs continue to escalate HardwareReplace f 3-5 years g . . . C o s t
- 14. ©2015 Curvature LLC …toCapEx savings. Base your tech refresh on: f 7-10 years g HardwareReplace • Leverage used/quality equipment • Engage third party maintenance • Delay CapEx spend • Recover CapEx/OpEx on forced upgrade 3rd-Party Maintenance Savings C o s t OEM Product Lifecycle is Irrelevant! P Business needs P Technical relevance
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- 16. ©2014 CURVATURE, LLC Customerwith 1200 Cisco WC6509 switches deployed worldwide Cisco ● Cisco maintenance unavailable – past EOS date ● Through Cisco’s “special dispensation” an average price of $10,500 Per chassis was offered for only 1 year ($12.6m) ● At end of 1 year Nexus upgrade offered (Capex $100m+) What is the impact of deploying these strategies? Curvature ● Curvature offered maintenance at $780,000 in year 1 ● 15% cost reduction each subsequent year, and no EOS date Total Savings in just the first year: over $110,000,000
- 17. ©2014 CURVATURE, LLC LargeUS market chain – 5000 stores in US and Canada US – 4000 stores ● Total Annual Opex Reduction in USA from $3,200,000 to $1,600,000 ● SmartNet retained on all security devices… What is the impact of deploying these strategies? Canada – 1000 stores ● Utilizing one-generation old update strategy in 1000 stores in Canada, cost per store reduced from $7000 per store to $2500 per store. ● CapEx savings - $4,500,000 ● Annual OpEx in Canada reduced from $900,000 to $320,000 Total Savings over 5 years: $15,400,000
- 18. ©2014 CURVATURE, LLC LargeFortune100 multinational investment bank ● Annual OpEx reduced from $15,500,000 to $10,000,000 by moving to TPM on 50% of their assets ($5,500,000 per year) What is the impact of deploying these strategies? Total Savings over 3 years: $53,500,000 ● 3 year rolling CapEx reduction of $30,000,000+ ● 3 year savings on network downtime avoidance of $7,000,000
- 19. © Curvature LLC serializedunits shipped in 2014250K+ 2014 revenue$320M+ employees worldwide600+ clients worldwide10K+ of experience28 years Global leader in technology equipment and services around the globe9 offices
- 20. 500+ Forward Stocking Locations available Asia Singapore Tokyo Europe Amsterdam London NorthAmerica Santa Barbara Dallas Sacramento New York Portland Offices Worldwide Where We Are
- 21. Our Solutions Pre-Owned Networking, Servers &Storage OEM Partnerships Curvature Products Maintenance & Support Professional & Managed Services © Curvature LLC TL-9000 certifiedTL-9000 certified Spirent® Test Center
- 22. © Curvature LLC OurVision for the Future It’s a complex world Customers are demanding a solution. They are demanding a BETTER WAY. Curvature is one company that can: • Buy and Sell anything - every generation of hardware • Maintain / monitor / manage everything • Single point of contact, multi-vendor lifecycle management partner for enterprise – anywhere and everywhere • Advanced Asset Management IT platform (SaaS) tying it all together • Independent (and honest) NOS and IT architecture services • Freedom: No EOL/EOS dates, no forced upgrades, unlimited flexibility for both hardware procurement and managed maintenance options.
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- 24. Resources Gartner: Know When It'sTime to Replace Enterprise Network Equipment. Link Curvature RFP Recommendations Link Lippis Report Research Note 203 ©2015 Curvature LLC
- 25. Networking Reception CURVATURE Booth: 333 ©2015Curvature LLC
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