Hardware Support Pricing Explained
Hardware Support Quote Variance
Shopping for support quotes (or gathering bids for our government entity folks) can sometimes yield surprisingly varied numbers. Why?? What's really going on in hardware support quote pricing structures?
There are several pieces at play in the pricing puzzle that come together to create a complete hardware support quote.
Why is there such a price difference in hardware support quotes?
Ever wonder why hardware support quote pricing can differ so much for the same devices? We'll explore key reasons behind pricing discrepancies — often, multiple factors are at play.
The Competition: OEM vs TPM Support Prices
When comparing hardware support quotes, a key factor is whether the support comes from the manufacturer or a third party provider. It's pretty common for a customer to get a bit of price shock (in a good way) when comparing the price of TPM hardware support to OEM support, especially if they haven't had much exposure to third party maintenance. We've actually had people say that the price difference is so surprising that it feels "wrong."
Hardware support falls into two basic categories:
Support from the manufacturer or from a third party provider.
However, things can still get a little complicated when it comes to what kind of support you are getting and from whom.
Third party support can be purchased from various providers, including TPM providers, MSPs, VAR resellers, and even subcontractors (more on this later). OEM support can be purchased from the manufacturer as well as MSPs, VARs, and other resellers.
Types of IT Businesses & Hardware Support Quotes
Confused yet? I promise we'll untangle things. So let's do a quick breakdown of the types of companies and the support you could be getting from them.
OEMs (i.e., Dell or HPE) concentrate on the manufacture and sale of hardware equipment, though warranties are usually part of the service offerings.
TPMs (i.e., M Global or Park Place) focus on enterprise-level hardware repair and support, though they can often provide additional services, such as field engineering, ITAD, and sourcing hardware.
MSPs (Managed Service Providers) provide services such as managed IT services, cybersecurity, networking, cloud integration, backups, and more. MSP providers can sometimes offer either third party support or OEM support to their clients (with a partner agreement of some kind).
VARs (Value Added Resellers) sell hardware (both enterprise & client) with customized products or services that provide value beyond order fulfillment. Services might include installation, configuration, troubleshooting, and more. They often partner with OEMs, enabling them to resell products and support services. VARs may also have relationships with TPM providers, allowing them to offer third party hardware support services.
Company Policies & Pricing Strategies
Provider Policies, Programs & Prices
Even when comparing similar providers (e.g., both TPM providers), there can be some big differences in the final price quote. Support providers may have varying business goals, resources, and specialty service offerings that could influence their policies and pricing strategies.
For instance, if a provider targets only larger companies, strict (and high) contract minimums would price out smaller and midsize companies.
Here are a few more provider-specific elements that could impact the final quote price.
Desired Client Type/ Size/Geography: Some providers may seek customers in a particular industry (such as healthcare or higher education) or focus on a particular region (or deprioritize certain regions based on resources).
Provider Specialty - Sometimes providers have unique-to-them resources (such as the ability to specialize in super old IBM AS400 systems). They may want to prioritize winning that business and, therefore, quote those devices more aggressively.
Add-on Services: Some providers have add-on services unique to their company (i.e., ParkView monitoring). These sorts of features often increase the contract price even when they are not "optional."
Support Details: Contract Size, SLAs, Add-on Services & More
Another element to consider when comparing support quotes is the contract details and SLA specifics.
SLA Fine Print - Even similar SLAs (such as 7x24x4) from different providers may reveal nuances that could affect the price. Details such as what the "4" in a 7x24x4 SLA means or whether the parts are stocked onsite, are just some of the background characters that could be impacting your quote.
Component Logistics Accuracy: Parts sourcing and logistics are dynamic, especially as devices age, so working off of static or outdated pricing matrices can affect the quote. For instance, let's say a device is getting up there in years, but parts are still readily available; not working off the most up-to-date information could unnecessarily increase the final price.
Configuration Details - What's inside the box matters now more than ever, as drives, memory (and other components) have become more expensive, and lead times can vary. Understanding restraints and operating with legitimate stocking lists and lead times has become an even more crucial part of the inventory management conversation.
Variance in any of these contract details can influence the variability of price quotes. A vendor working with outdated or incomplete information may end up quoting a much higher (or a lower, but not deliverable) price than the competition.
Who is providing the services?
Partners, Subcontractors, & More
Most people don't realize how common it is for support providers to lean on partners to help. In fact, it's pretty rare for a provider to have their own help desk and engineering team built out (in case you were wondering, at MGS, we have our own in-house, U.S.-based help desk and engineering team).
There's nothing wrong with partnering up, and it can benefit all parties involved, especially in the case of VAR resellers and MSPs. We have partners who use our support services for their customers (some white label and some MGS branded). They have cultivated their client relationships, and we are happy to step in and provide the back-end services.
Government Contracts, Middlemen, & Cost Consequence
However, there are times when adding extra layers can be problematic, complicating the end user's experience and increasing the overall cost.
This is especially true in the government space. It's incredibly common in the government bidding landscape to have companies that solely focus on finding and winning government bids and later find a provider or business to fulfill the product or service, adding their layer of markup to the product or service.
The same company bidding on RFPs for toilet paper could also be the one procuring the IT services! LOL. Might not be the most effective way to find a vendor who actually knows what they're doing (just saying.)
Going to the source and eliminating the middleman can not only bring the support quote price down, but it can also ensure smoother better service delivery.
Inside an MGS Support Quote
General market trends and anecdotal data from our customers about competitor quotes are one thing, but we can also look under the hood of our own support quotes. Obviously, this one is for demonstration purposes only 🙂
We get asked how our prices are so good all the time — here's the breakdown of where we stand on the above points:
We are a TPM provider so our prices are going to be waay cheaper than OEM support.
MGS Policies - We prioritize flexibility and fairness with no contract minimums and no unwanted add-ons. We don't put limits on the types or sizes of clients we help. We love working with customers across industries, including local governments, education, healthcare, and more. And we love our customers no matter how large or small — from Fortune 500 companies to small businesses, and everything in between.
Support Details: We always go the extra mile to ensure we are working with the most up-to-date and precise information to give our clients the best possible (and actually deliverable) price. It's part of our process to find out what you need and want and then tailor your SLA accordingly, ensuring you're only paying for what you actually need and want and none of the stuff you don't.
We have our own in-house U.S.-based help desk, engineering, and logistics teams. Not only does this impact the price (no need to mark up someone else's service), but it also means we can control the quality of service and pivot on the fly when the need arises.
Discounts, Terms, & More With M Global Support
MGS Discounts
We offer ways to save even more with multi-year and quantity discount options. Extending contract time frames or putting additional assets under coverage can save you money.
For example, a 3-year contract could save you up to 20% annually compared to a 12-month contract, and getting support for 100 servers rather than 10 could save you up to 30%.
T&Cs: Payment, Changes, Cancellations & More
Payment Options: Depending on the situation, the options usually include paying with a credit card or Net 30 payment terms. If you choose to pay by credit card, we send you a secure link that protects your financial details. If you prefer payment terms, we require a PO to get things going.
Making changes to Your Contract: Most of the time, it makes sense to add additional devices to the current contract and keep a single renewal date (also called co-terming). The cost would be prorated through the expiration date. For instance, if you wanted to add devices 3 months into a 12-month contract, your new charges would be for 9 months of support, and everything would renew together. However, we can also create a new separate contract for the devices if you prefer.
Canceling your contract: Unlike most providers, our cancellation policy is pretty easygoing. You don't have to pay a fee or sacrifice a major organ to cancel your contract. Cancellation requests are allowed after the first 3 months of service, and customers must provide a 30-day notice in writing. The refund amount is prorated based on the length of service.
Why are MGS prices often so much lower?
We get asked some version of "how are your prices so good?" all the time. The implications of what people are often curious about also often encompass: Is this price legit? How can this be good service at this price? Is this company legit?
We get it — you're not alone. We've even lost deals because our price is too low. (FYI, if that happens and you want us to raise the price for you, we are more than happy to oblige, haha).
But it's pretty simple. If you are comparing one of our quotes to OEM, a provider with strict policies and particular pricing strategies, or a subcontractor marking up support provided from someone else, there's a pretty good chance you will be pleasantly surprised. We have the resources and infrastructure in place to provide the support, and we don't mark up our services just to increase our profit margin.
Our business is modeled on the idea that we develop long-term relationships with our clients where we can be a resource and a trusted part of the team. Our customers stick around, and it's a win-win for all of us.
Learn More About MGS
M Global Can Help!
M Global is in the business of providing solutions. We want you to consider us an extension of your team, a trusted resource and an advisor.
If you have more questions or want to chat about hardware support costs, we'd love to hear from you.
Call us today at 855-304-4600.
