Monday, November 23, 2009

The differences

People often ask me what differentiates the service and support that Zerowait provides from that of an OEM. I like to break it down to three component parts: Cost, Complexity and Compromises.

The cost of support services from Zerowait is typically 40% - 60% lower than the cost for support from the OEM on the same equipment. The primary reason is that the OEM typically assumes that there is no competition for their unique product and the customer will not try to use another support organization on their proprietary parts. OEM's seem to believe they have cornered the market. However, many customers have figured out that their vendors are using Off-the-Shelf components which can be (and have been) successfully cross referenced and inventoried by other support organizations. Further the OEM often recycles used equipment to service RMAs, while not exactly publicizing the fact. This leaves customers wondering what's the difference? Pretty much none, as it turns out. Therefore, a customer looking for a support organization for legacy equipment support or seeking a source for inexpensive system improvements often discovers that their OEM is more expensive for no other reason than "because I said so", coupled with an insistence on upgrading the customer to a completely new system. The problem for the OEM is that, especially in tough economic times, top-to-bottom upgrades are often not needed and cannot be justified. Cost containment is a big reason that independent parts, service and support organizations are growing.

Often OEM's will say that their proprietary systems are so complex that no independent service organization can possibly handle their equipment's unique needs. Meanwhile, these same companies habitually outsource their phone and field service to third party companies for their own cost containment reasons. As a result, complexity and simplicity are mixed in marketing messages. The reality of service and support is that OEMs design their equipment for either efficient parts replacement and repair or for OEM-service only repairs. For systems no longer under OEM contract, third party support organizations can and do provide an affordable and simple option for taking the complexity out of support and providing an alternative.

Many OEM's try to say that using third party support compromises your legacy equipment's reliability. This is perverse logic since these same companies, when asked about legacy support, demur that their engineers are no longer proficient with EOL equipment and therefore a customer needs to upgrade to maintain the highest levels of support. This logic makes it seem as if the high availability equipment that you purchased last year is now low availability simply because the OEM has superseded the equipment and no longer wants its people to know how it works. Does that make sense?

Ultimately, customers are put into a compromising situation if they do not allow competition into their data center. Without competition proprietary OEM's will not have any reason to improve their support quality or lower their support prices. That is why savvy customers are engaging third party support providers and driving support prices down and driving support quality up.

Thursday, November 19, 2009

Supercomputer show

I have been traveling over the last few weeks visiting customers around the Northwest. The story is the same pretty much everywhere... Budgets are tight, and our customers are looking for value in their storage support services. The tough economy causes a lot of customers to try new and creative things to keep their costs down.

The supercomputer show in Portland was well attended and their were a lot of our customers there, I was able to catch up with many folks that I have not seen in a while.

Wednesday, November 04, 2009

Looking into the future

2009 has been a tumultuous business year and many of our customers have cut back on new equipment purchases. Today in the Wall Street Journal there was an article with the following headline. "Business Bankruptcy Filings Increased 7% in October"

Later in the article there was this gloomy prediction.

"On a year-to-year basis, business bankruptcies shot up 24% in October compared with the same month in 2008. Mr. Williams called that increase "substantial" and said it is a bad omen for the final months of 2009 and the first quarter of 2010.

"Bankruptcy filings are a lagging economic indicator so it's likely that we'll see bankruptcy filings increase for the next several quarters," he said.

Through the first 10 months of the year, 74,832 businesses filed for bankruptcy, a 16% increase from the same period last year.

The total number of October bankruptcies, including both personal and commercial filings, increased 20% from the same month last year. "

It is hard to be optimistic in this business environment, and yet our sales continue to grow as people embrace alternatives to save money.