EOSL, IT maintenance, end of service life
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EOSL Extension: When it Makes Sense, and When it Doesn’t

EOSL Extension: When it Makes Sense, and When it Doesn’t

Last month, we wrote about end of service life (EOSL) extension and why third-party extension services can be a better investment than upgrades or extended warranties. However, the discussion on EOSL can’t end there because – inevitably and in all cases – the cost of maintaining hardware will eventually exceed the cost of replacing it.

As Jason Maxham observes in his timeless Repair or Replace,

“The need a broken machine was serving is the most important consideration: if it can be met at a lower cost some other way, fixing becomes unnecessary. If the need is still present, but has grown or diminished, then upgrading or downgrading should be on the table.”

In short, deciding whether to extend the service life of a deprecated asset reduces to a simpler question: when does it make sense to replace it?

We’ll tackle that question first by killing off two big myths about service life.

Myth #1: Deprecated Means Useless

Thinking in analogy, a systems admin might believe that keeping expired hardware around is like using Windows 98 in 2019. It’s slow, cumbersome and ridiculous – right?

Whether to upgrade involves a simple consideration: does the system still adequately serve its function? When the answer is “yes,” then retirement is unnecessary. 85 percent of hospitals instead of cell phones, simply because they work, and they work especially well in the medical environment.

Myth #2: Usable Means Useful

At the same time, most companies won’t be utilizing 4 year old servers to deploy new applications or cloud solutions.  Even if it is usable, that does not make it useful. An organization’s technological need grows with the world around it.

Technical debt should not be overlooked when determining whether a system remains “useful”. Microsoft – once the world leader in consumer electronics – famously failed to win any significant share of the smartphone market simply because it came to the game too late.

Likewise, in the data center, remaining on legacy systems while competitors move onto better efficiency, power utilization and automation will cost in the long run even if it produces short term savings.

 

Measuring the Value of Equipment

With two myths out of the way, it’s clear that extending service life can often be the right decision up until a point. Deciding when it’s time to replace equipment means understanding and gauging its value.

  1. Operating value – how much value does the equipment provide an organization daily? This quant can be assessed by estimating impact of failure.
  2. Salvage value – although less important than other measures, the value of equipment in terms of parts or scrap is significant especially as it becomes more expensive. The salvage value of equipment also depreciates as time goes by.
  3. Technical value – technical value is the inverse of technical debt; if a system is still reasonably modern and will remain so for the foreseeable future, then its value is higher than a system that will be long surpassed next year.

When a data center’s operations are projected for the coming year or business quarter, the sum of these three values should exceed the cost of replacement. When that balance shifts in the opposite direction, then a data center is paying extra for the privilege of using outdated systems.

Useful Questions

Here are four useful questions administrators can use to decide whether EOSL extension is appropriate at any given time:

  1. Over an arbitrary period, how will the cost of third-party maintenance compare with the cost of a warranty or warranty extension?
  2. Are there recurrent issues with the deprecated hardware? If so, how serious are they?
  3. How does the latest hardware compare with current systems in terms of performance and features? (assessing technical debt)
  4. How costly would it be for the hardware to suffer critical failure?
  5. Can third-party maintenance extend the useful life to allow for migration and upgrades on your terms, not the OEM’s terms.

When enough questions have been asked and answered to assess whether EOSL extension is expedient, it can be useful to project a date past which the systems should be replaced. This gives a timeline for routine evaluations and alleviates the burden of guesswork from maintenance.

Professional EOSL Extension for Northern Virginia

Located near the booming data center corridor in Loudon County, VA, Digital Tech Inc provides rapid response maintenance services including EOSL extension, spare parts, short- and long-term maintenance agreements, migration assistance and depot repair options. Our skilled engineers offer multi-vendor support, covering IBM, HP, Dell EMC, Cisco, NetApp, and many more.

To learn more, contact us today.

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Third party maintenance support for aging IT systems
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Dealing with Warranty Expiration for Aging IT Equipment

When hardware warranties expire or systems reach their end of service life (EOSL), there’s good reason for concern: the industry standard for data center reliability is 99.99%, and one system going offline for seconds can have disastrous consequences. A data center depends on well-maintained, dependable equipment that won’t cause downtime, latency or needless expense.

The average length of a manufacturer warranty is about three years, and once that time is up, DCAs are often conflicted about how to proceed.

There are four basic strategies for approaching post-warranty maintenance:

  1. Hardware Refresh

A sizeable number of companies will prefer to reduce the risk of system failure by simply replacing hardware as soon as the warranty expires. This is the most straightforward approach to maintaining operations and service life.

Advantages: By replacing hardware every few years, companies ensure that their systems are up-to-date. This approach also reduces the risk of equipment failure and brings a new service lease with it.

Disadvantages: This is the most expensive and labor-intensive approach to data center maintenance. It is also unnecessary in most cases: systems will generally function long after a warranty expires, and expiration only represents the maximum amount of time a manufacturer can offer service on the same equipment profitably.

  1. Warranty Renewal

Many hardware manufacturers offer clients the opportunity to “renew” their warranty for a fee. From an operations perspective, this means that nothing changes – techs will show up when called and provide the same services as before.

Advantages: A warranty renewal is the most seamless way to extend hardware’s “shelf life”. Until the renewal expires, operators can proceed as normal without worrying about replacements or DIY repair.

Disadvantages: Equipment sales constitute the bulk of revenue for most hardware manufacturers, and service policies are therefore designed to encourage equipment replacement. As such, warranty renewals are often excessively costly, and do not represent the true cost to maintain systems post-warranty.

  1. DIY Maintenance

Some data centers will opt to end their relationship with a manufacturer after warranty expiration and go solo, addressing issues as needed.

Advantages: Depending on the condition of hardware, DIY maintenance can be very inexpensive. Operators will not pay a premium for regular checks or commit to any service which isn’t strictly necessary.

Disadvantages: DIY maintenance assumes that a data center has access to miscellaneous OEM hardware, a competent team of technicians, and proper understanding of common failures in order to effectively stock spare parts for anticipated failures. Unpredictable repairs can be costly.  As companies are not in the business of repairing failed IT systems, this approach typically results in inefficient IT.

  1. Third Party Maintenance Extension

This lesser known option is a middle-way between warranty renewal and DIY maintenance. Companies can work with third party maintenance (TPM) providers who offer the same functions as the OEM, usually on a much more cost-efficient basis.

Advantages: TPM life extension is generally less expensive than OEM warranty renewal but provides the same services. For the OEM, maintenance is an afterthought; for third party providers, it’s a business specialization, and their staff are typically certified OEM technicians.

Disadvantages: Finding a good TPM provider can be difficult depending on location and need. Some TPMs operate no differently than the OEM in terms of addressing service needs and service call justification.

Professional EOSL Extension for Northern Virginia

Located near the booming data center corridor in Loudon County, VA, Digital Tech Inc provides rapid response maintenance services including EOSL extension, spare parts, short- and long-term maintenance agreements, migration assistance and depot repair options. Our skilled engineers offer multi-vendor support, covering IBM, HP, Dell EMC, Cisco, NetApp, and many more.

To learn more, contact us today.

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