In our first blog for Systems Integrators, we introduced the potential cost reductions possible for your federal clients, by taking a closer look at the best practices of Hardware Lifecycle Management. But, more specifically, I shared the notion of the “hybrid hardware support model.” This is where assets under warranty are maintained by the OEM, but post-warranty assets are maintained by a significantly less expensive independent hardware support provider (like XS International).
But, before any readers choose to dive deeply into hybrid hardware support remodeling, we respect that you prefer to have a greater sense of the potential savings you can generate for your federal clients. In this blog, we will share a very simple formula to help you quantify and forecast this potential – and the formula is inherently conservative, but extremely accurate.
You will need to be able to collect (or closely estimate) two data points for each client. They are:
- X: The percentage of the client’s total hardware footprints (servers and storage) that are post-warranty.
- Y: The client’s total current annual hardware operating expense for all data center server and storage footprints. Note: This is a Total $ figure and NOT just their OpEx budget for post-warranty hardware assets.
While these are not perfectly designed mathematical formulas, you WILL get the point:
- If X is 20%, you can expect to see a 11-12% reduction (savings) from Y.
- If X is 22%, you can expect to see a 12-13% reduction (savings) from Y.
- If X is 24%, you can expect to see a 13-14% reduction (savings) from Y.
- If X is 26%, you can expect to see a 14-15% reduction (savings from Y.
Perhaps it is easiest to understand with a scenario: You’ve learned that 22% of your client’s hardware assets are post warranty and that their total annual hardware OpEx (for in-warranty and post-warranty) is $18 million annually. You can then expect to drive annual savings of 12-13% off their total budget, or $2,160,000 - $2,340,000 in savings driven.
An hybrid hardware support model starts to make a lot of sense when you can quantify the potential!
XS International is ISO9001:2015 Certified, meets SAE AS5553 Standards, currently supports 42 federal agencies and all of the Top 10 Federal Systems Integrators. We encourage you to follow us at LinkedIn for weekly blog postings from all our Subject Matter Experts.
Doug Krueger, CEO, XS International
Based just outside of Washington D.C., Doug joined XS International in 2014 as Chief Executive Officer. Prior to XSi, Doug served in leadership roles at Blue Coat Systems, Fortress Technologies (acquired by General Dynamics), Tumbleweed Communications (acquired by Axway, Inc.), Juniper Networks and Cisco. Past leadership roles included both sales and operational responsibilities, thereby establishing his skillset as a client-driven chief executive for XSi. Doug leads the Systems Integrator/Federal/Defense business for the company, including solutions development/architecting. A native of Wisconsin, he earned his bachelor’s degree from the University of Wisconsin, then completed coursework toward a Master’s (Finance & Accounting) at Oklahoma City University. He enjoys distance running, golf, and the University of Wisconsin sports teams.