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Are Annual Maintenance Contracts for Network equipments an Overkill?

Annual Maintenance charges for network equipments can vary from 2% to 20% per year. There maybe different levels of support available to¬† customers (generally after a year, when the warranty ends) depending upon the type of support they sign up for. But, don’t you think these Annual Maintenance Contracts for Network equipments are an Overkill?

Tell me one thing: How many of your network equipments actually fail?

Let us take network switches – A company may have many network switches distributed all over their network. Often they are bought from multiple vendors but a few companies may have bought all the switches from a single vendor as well.

Generally, these network switches have high MTBF – Mean Time Between Failures and they are quite reliable. Companies also invest in a few additional switches (at least one) for stand-by purpose, to replace defective switches immediately till a new equipment is provided by the vendor. The probability of failure of a whole network switch is lesser when compared to failure of individual ports or individual components like power supply modules, etc.

Even if a switch fails after three / four years, do you think its worth repairing it by replacing the failed parts? Or is it better to buy a new switch which supports much higher speeds/ bandwidth for a much reduced price? New Network switches have this knack of supporting more speeds at lower price with every passing year!

So, if one pays a huge AMC (Annual Maintenance Contract) price for all the network switches together, don’t you think its going to be an overkill as at most only a few network switches may fail totally (processing unit or other such major failures)?

Even if they fail, can the parts/ whole switches not be replaced individually at a much lower cost than the AMC cost incurred every year for all the switches collectively? Even if one needs an immediate replacement, is it difficult to maintain one or two standby switches in the network?

One might argue that this strategy might work for Layer 2/ Edge Switches. How about Layer-3 Switches and Specialized Network devices for which buying and maintaining hot-standby units becomes economically infeasible as there are only a few of them on the network and each one is pretty expensive?

This argument holds good merit because its difficult to even obtain spare parts at a fair price for these expensive specialized network devices as they can only be purchased from a single vendor.

Don’t you think it might still be possible to replace failed parts/ replace the L3 Switch with the latest technology when it eventually fails? I mean, L3 Switches are pretty reliable and many of them come with redundant power-supply modules and even redundant processor modules. Its definitely a risk – but isn’t it worth taking for the cost savings involved? And also for the fact that these equipments become obsolete fairly soon?

Let us consider even more specialized equipment like a Wireless Controller. One knows that all the access points and wireless controller can be purchased only from a single vendor. There may not be issues with access point failure as spares can be maintained for them or additional access points can even be purchased at a lower cost.

But what if the Wireless Controller fails and does not have a support contract? The entire wireless network may come down with it!

Before we come to conclusions, let me reiterate the fact that devices like wireless controller do not fail for many years at a stretch. They need to be manufactured reliably because they are supporting a whole network! Wireless Controllers do come with dual power supplies / dual processor boards for hot-standby, etc.

So, again we come to the same question – Don’t you think its worth taking a risk by not getting in to an Annual Maintenance Service Contract for Network devices?

Let me know your opinions in the comments section.

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