Competitive Self-Maintenance Programs of Leading Hardware Vendors

Transcription

1 Competitive Analysis Competitive Self-Maintenance Programs of Leading Hardware Vendors Abstract: The key to a meaningful self-maintainer program is in the bundling of the services and documentation. Self-maintenance offerings from seven leading computer hardware companies are analyzed here. By Eric Rocco Strategic Business Imperative IT hardware vendors must address the needs of their self-maintaining installed base and develop revenue-producing programs to help them achieve their internal support goals. Publication Date: 7 January 2004

2 2 Competitive Self-Maintenance Programs of Leading Hardware Vendors Introduction Self-maintenance programs offered by technology vendors generally provide end users with some level of training, access to service parts and access to technical support so that end users can support their own technology with their own personnel (eliminating the requirement for purchasing support contracts). Offering such programs may appear to conflict with the sale of support contracts by technology vendors. Therefore, vendors question whether self-maintenance is an opportunity or a threat to their business. In "What Users Really Want, Need and Believe About Hardware Support: 2003 Update," ITPS-WW-UW-0119, Gartner reveals that a significant portion of enterprises self-maintain their hardware assets. According to the report, for example, 38 percent of desktop/mobile PCs are selfmaintained and so are 26 percent of workgroup/lan servers. Given these findings, it generally makes good business sense for technology vendors to offer some level of support to help self-maintainers help themselves. However, the following two critical elements of best-in-class programs need to exist: An opportunity to derive a revenue stream in the form of parts sales and logistics management, after-business-hours support coverage, training, per-incident support and certification A clear, yet nonintrusive, path to convert many self-maintainers to support contract customers over time This Perspective presents snapshots of the official self-maintenance offerings of the following leading computing PC and workstation technology companies: Acer Apple Dell Gateway HP IBM Sun Comparative Analysis Table 1 lists the competitive snapshots of the self-maintenance programs of seven technology companies. Gartner collected the information presented in each snapshot during the second quarter of 2003 via primary research surveys of these technology companies Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 January 2004

3 3 Table 1 Competitive Self-Maintenance Programs Offering Acer America Apple Computer Dell Gateway HP IBM Sun Self- Maintenance Contract Offering Program Restrictions Program Fees Per-Incident Repair Costs Same as T&M? Customer Requirements /Investments Needed Selfmaintenance partner Self-servicing tools Dell Premier subscription (Note: Access program Apple may directly (on dell.com) authorize selfservicing locations educationand business channels on a case-by-case basis; such customers generally receive the same level of support as Apple ASPs) Yes, component of Gateway Authorized Service Provider program HP Self- Maintainer program Not specified None Not specified Yes Minimum annual purchase volume levels; technicians must be HP Serviceauthorized; service on customerowned products only Training required Productdependent None $699 per year plus one-time administration charge of $300 per self-servicing customer location Tier 2 (labor reimbursement) annual enrollment fee = $1,500; annual online technical certification for 1 technician = $179; other fees for training IBM Warranty Self- Maintainer special bid SunSpectrum Bronze is geared toward Sun selfmaintainers Warranty SunSpectrum service must Bronze; be provided Software by companies' support own options, T&M, employees; training cannot services provide service work for other companies $500 $200 per year Tech must be A+ certified before becoming IBM-warranty certified, must maintain a hardware manual service library; initialization fee required Yes, part of the SunSpectrum Bronze price Not specified Yes Not specified Yes No Yes, depends on system type and software installed Same as for any other Appleauthorized provider ASP = application service provider PSG = Personal Systems Group (an internal IBM division) Source: Gartner Dataquest (August 2003) Minimum of Yes two Dell certified technicians per service location; see program fees Minimum annual purchase of qualified HP products; $450 toolkit and documents; plus test fees for authorization of technicians $1,000 initialization fee covers all PSG product lines Yes 2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 January 2004

4 4 Competitive Self-Maintenance Programs of Leading Hardware Vendors For each vendor, the following information is presented: Self-maintenance contract offering Lists the official name (if there is one) of the program Program restrictions Highlights, if there are any, restrictions or requirements for users to be part of these programs Program fees Lists any fees or other payments required to be a part of the official program Per-incident repair costs same as time and materials (T&M) Indicates whether self-maintainers pay the same price for per-incident support as do traditional T&M customers Customer requirements/investments needed Outlines what clients need to do or invest in to be part of these programs Table 1 reveals that there are varying levels of offerings and commitments among the seven vendors profiled. For example, IBM and HP appear to have the most robust offerings that actually use the term "self-maintainer" in the formal program name. Dell and Sun have formal service offerings that are geared toward self-maintainers, but not necessarily an exclusive offer just for them. And Apple and Gateway generally provide similar offerings to self-maintainers as they do their own authorized service providers. Five of the seven vendors shared specific prices they charge for customers to be part of their respective programs. However, all vendors represented have costs, either direct or indirect, required to be part of the program. Gartner Dataquest Perspective The self-maintainer will be a factor in the industry for the near future. Many users believe they can respond to hardware or software issues faster and determine the appropriate level of support needed. With a significant percentage of enterprises self-maintaining, there is a large enough market for vendors to develop profitable service and support programs just for them. Through annual fees, training for certification, spare parts and technical documentation purchases, vendors can make what is often viewed as an unimportant market niche into a profitable line of business. Most self-maintainer programs have a low profile. When searching and exploring various vendor Web-sites, only a few provide formal program information. Even if the information is on the Web-site, customers typically must search through the vendor's Web site or know the exact program name to locate the offering Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 January 2004

5 The key to a meaningful self-maintainer program is in the bundling of the services and documentation. With no annual program fee, the package should include fee-based advanced level technical support, overnight spare parts delivery, and basic technical documentation. Then, next level, for an annual fee, should include advanced level diagnostic information, either online or via CD-ROM, and continued training. There is also revenue opportunity from certifying or authorizing end users on maintaining equipment. Users are attracted to this since it typically allows them to be reimbursed for in-warranty repairs. Gartner Dataquest recommends that all IT vendors consider establishing formal self-maintenance offerings by embracing the opportunity and not the threat. Such programs lead to increased customer loyalty and potential revenue streams and can prevent vendors from being "locked out" of accounts (such as defense and national security) with mandated selfmaintenance policies. With targeted marketing campaigns and the right bundle of services, vendors could capitalize on a wide-open opportunity and potentially upsell support contracts in the future. 5 Key Issue How will product support services be priced and packaged to meet customer demand and requirements? 2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 January 2004

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