Strengthening the Supply Chain Means Reducing Reliance on OEMs

Article By : Sachi Thompson

While the supply of infrastructure materials and chips remains short, demand for data centers is at an all-time high.

European growth has faced several significant challenges over the past few years. The pandemic disrupted the global supply chain, impeding access to critical components in the region. Hopes of recovery faded when demand began to grow and panic buying set in, overwhelming a supply chain that was already struggling with logistics and transportation bottlenecks. Fast forward another year, and recent events such as the Ukraine war, rising energy prices and inflation, raw-materials shortages, and ongoing logistical breakdowns are exacerbating the shock to supply in the EU.

Yet, while the supply of infrastructure materials and chips remains short, demand for data centers is at an all-time high. The continued trend toward wider distribution of cloud and content services in the EMEA region will drive further construction of data centers throughout Europe and beyond the more mature FLAPD markets (Frankfurt, London, Amsterdam, Paris, and Dublin).

As a result, planning for the future now requires extreme vigilance. Survival is dependent on careful navigation by CIOs and IT decision-makers, who need to ensure their businesses can keep up with storage demands, maintain a healthy and secure infrastructure, and drive business value — all while keeping costs in check. The right equipment is desperately needed to achieve this, and quick access is essential for ensuring continuity.

Given the less-than-ideal circumstances, how can CIOs face these problems head on?

Regardless of what is happening in the wider world and global supply chain, IT infrastructure life cycles remain the same. But traditional methods of building and maintaining infrastructure are becoming unfeasible, especially in Europe. Reducing reliance on new OEM hardware will be key to navigating the continuing challenges.

Data center

Why choose “pre-loved”?

The draw for using new hardware to build and refresh infrastructure is strong. There are many fixed notions about the superiority of new hardware over used equipment. The typical OEM recommendation that hardware be refreshed every three to five years — not a long period of time — hasn’t helped. CIOs would be forgiven for thinking that if the original manufacturers suggest upgrading systems so quickly, then hardware that is twice the recommended age won’t be fit for purpose. But this simply isn’t the case.

Extending the life cycle reduces costs in the long term

The priorities for businesses right now are keeping down costs and maintaining continuity, and lengthening the hardware refresh cycle can help achieve those goals. Third-party manufacturers and suppliers can enable this process.

First, engineers with the requisite knowledge and experience are deployed as consultants to review an entire system and make recommendations about what needs attention and what doesn’t. These engineers know exactly what needs replacing or upgrading and can help localize the solution. By replacing parts only where needed, the entire infrastructure can be made to work significantly harder for the original investment, which is far more cost-effective than undertaking a full system refresh. Equipment doesn’t need to be scrapped after hitting a certain, predetermined age, especially not if it has been reviewed and maintained properly by experienced engineers.

Similarly, whereas OEMs typically charge higher costs for hardware, maintenance, and support services, third-party maintenance (TPM) providers work to rein in costs and offer highly competitive pricing. For example, by preconfiguring hardware, freight expenses and installation time can be dramatically reduced.

Finally, once hardware is up and running, TPMs offer the adoption of post-warranty and end-of-service-life (EOSL) support services so that the initial hardware investment can be optimized to work smarter, thereby breaking the traditional, “advised” three- to five-year replacement cycle.

Access to local supply with pre-owned inventory

In addition, same-day shipping is usually available on hardware, equipment, and stock housed locally with TPMs. When businesses have a consultative and collaborative relationship with engineers, crucial demands can be met quickly, with customer service extending to providing door-to-door delivery in some cases. Shifting to using local-based solutions providers and TPMs can help companies free up both resources and capital because of lower costs and access to direct support services. Those resources can then be funneled into other projects.

Weighing the options

It is a fact that EU enterprises can’t afford to keep replacing hardware on such a frequent basis — especially not when the market is growing and supply is dwindling. Nor can they afford to wait for equipment that has long lead times for delivery. Right now, businesses must focus internally on building longer-term procurement strategies and maintaining the longevity of IT infrastructures to ensure they can be used to full capacity.

Now may be an important time for organizations to continue building strategic relationships with TPMs so that they can capitalize on the increased flexibility, efficiency, and affordability that these businesses provide. Making wise use of such relationships can help companies successfully navigate the turbulence of the next few months and maintain an optimized, cost-effective IT infrastructure. Strategic alliances with TPMs offering pre-owned hardware are a more affordable solution and can help ensure agility when it’s needed most.

 

This article was originally published on EE Times Europe.

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