The Ups and Downs of Hardware Warranties

In IT shops around the globe the decision is made daily as to whether to go with a new piece of hardware, or a refurbished unit.  Therein, do we need two processors or four?  Can I get by with a 1-year warranty, or do I need a 3-year next-business day warranty?  For each of these decisions, the answer differs dependent on the application and purpose of the hardware.  It is not uncommon for different warranty options to add as much as fifty percent to the total cost of ownership for IT systems.  So how do you decide on the basic no-frills warranty versus the “Cadillac” gold warranty?  The answer is never the same twice…

Let’s face it; technology does us no good when its sitting, broken, in the corner of the office.  At the same time, budgets have limits, and while it would be nice to have fully redundant backup systems for every piece of IT infrastructure – that just isn’t going to happen in most real world scenarios.

When looking at which type of warranty is appropriate for a new server, switch or other piece of IT gear, it is common to do a risk assessment on the particular piece of hardware a company is buying.  Just by asking a few simple questions you can find out immediately what your tolerance for downtime is:

· Is this supporting a mission critical system?

· Are there backup/redundant systems in place in case of hardware failure?

· If the machine fails, what type of time window can the business tolerate to get a repair made?

· Is this supporting development or production areas?

· Do we want to be self-supporting or rely on the vendor for repairs?

Warranties, especially in the IT world, can be complex.  While most pieces of new equipment come with a standard manufacturer warranty, that often does not mean you will get immediate replacement should the hardware fail.  Many standard warranties can take days to get new equipment in place and only after going through a remote diagnosis procedure.  While this may be fine for some IT systems,  it doesn’t cut it for systems that are supporting your customers and other mission critical services.  This is why many vendors such as Dell, HP and Cisco offer various tiers of warranty support.  This includes everything from 4-hour on-site service to “next business day” hardware replacement on your HP hardware, or other IT equipment.  If one of your core Cisco switches supporting your e-commerce site fails, it’s a good bet that you can justify the cost in going with the 4-hour on-site replacement option.  If it’s a development SQL Server, chances are you don’t want to spend a fortune to get that back online – as long as it gets back up within the next day or two.

Often times a company does not think of the consequences of being down until something does go wrong.  As part of normal IT hardware procurement procedures it is often encouraged that customers think through disaster recovery scenarios.  Nobody wants to spend money they don’t have to, but if a company does not think of the consequences upfront, the cost can be far greater down the road when you do need warranty service.  To warranty or not to warranty – how much risk is your company willing to take?

About the Author: Steve Oono is the VP of Sales for Mojo Systems. They are the leading industry provider of Sun servers, HP servers, IBM, Oracle, and Fujitsu hardware and servers. For more information, please visit

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