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Negotiating an IT Hardware Maintenance Contract Made Simple

Negotiating an IT Hardware Maintenance Contract Made SimpleShopping for IT hardware maintenance coverage can be a bit of a bummer. Much like insurance, IT hardware service contracts are something you need to have in place but hope you never need and negotiating the best deal on a hardware service and maintenance agreement can be a challenge. The good news is that the process doesn’t have to be painful and today we’re going to share how you can make the negotiating process as easy as possible.

Negotiate with your current maintenance provider. You might think that hardware maintenance and service contracts are non-negotiable, but that’s not true. With a soft economy and savvy IT managers who regularly demand better terms, this is the best time to negotiate with your service and maintenance providers. Ask for the terms you want—the worst thing that can happen is that they say no.

Consider a third party maintenance provider. It used to be that the original equipment manufacturer (OEM) was the only company you could count on to provide service for your IT hardware. As the only game in town, the OEM could charge a premium for their maintenance service because they knew you didn’t dare go without it. Today there are a number of third party maintenance providers with OEM-certified technicians on staff that provide the same quality of maintenance and service, but at a significantly reduced price. If you aren’t considering a reputable third party maintenance company for your service agreements, you’re probably spending too much.

Avoid auto renewal clauses. Automatic renewal is just what it sounds like—your contract renews automatically if you don’t cancel your maintenance agreement before the appointed deadline. Put into place to ensure that maintenance customers don’t experience an unexpected drop in coverage and so that the maintenance company maintains a steady revenue stream, automatic renewal clauses aren’t always in your organization’s best interest. Do what you can to get out of them entirely and if you can’t, at least negotiate a month-to-month agreement upon renewal rather than a 12-month term.

Lock your rates. Negotiate a fixed rate for a term of three to five years whenever possible—especially when you are required to sign an agreement that auto renews. Doing so will allow you to budget for maintenance as you move into the future and will save you the hassle of unexpected price increases later. If you can’t secure a fixed rate for a multi-year term, you can consider agreeing to limited annual increases as long as they are tied to a standard economic indicator (e.g. the consumer price index). Avoid service agreements with unspecified variable rates.

Extend your idea of product lifecycles. Today’s IT hardware has a longer shelf life than that of the hardware from ten years ago. This is the result of two things: First, the cycle of innovation and the resulting demand for new equipment has slowed down over time. Servers, storage, and networking hardware simply isn’t innovating as quickly as it has in the past. Second, today’s IT hardware is built with fewer moving parts, resulting in a smaller chance that the equipment will break down. Consider these extended life cycles when you negotiate your maintenance agreements to ensure that whatever agreement you sign takes into account what you consider to be the hardware’s true useful life.

Look at more than one provider. Evaluate two or three vendors whenever you are considering a new maintenance and service agreement. By keeping your options open, you will secure the best terms for the best price without having to skimp on coverage. Securing multiple quotes also ensures that the vendors give you their best possible deal right away.

Ask for a better deal. If you don’t like the deal you’ve been offered, ask for a better one. When a deal is on the line, you will find that service and maintenance vendors can be very accommodating. Be creative in identifying changes that will provide real benefits to your organization and then ask for them. If the provider can’t honor your requests, they will counter with an offer that typically will be better than the original agreement. It never hurts to ask—and if they know they aren’t the only provider you are considering, they are likely to be even more flexible to meet your needs.

To learn more about how third party IT hardware maintenance and support can benefit your organization, call 888-210-7636 or contact one of our IT Hardware Specialists today for a free consultation.