Leasing vs. financing: What’s the difference?

Posted by at 10:06 AM

SHI blog post imagePurchasing new hardware or software can be a costly and burdensome investment for even the most profitable organizations. But purchasing outright isn’t a company’s only option. Organizations can lease hardware and finance software and maintenance to ease upfront costs and increase IT flexibility. So before you sign that check for your next big order of desktops, servers, or software, see if any of these options are right for you.

The two types of hardware leasing

Leasing is the most common way to acquire IT equipment without paying for it up front. There are two main types of leases: the fair market value (FMV) lease and the $1 buyout lease.

FMV lease

The most common type of hardware lease is the FMV. It’s similar to a car lease, in that you don’t own the product at the end of the term, which is typically two to three years. In an industry known for a 36-month product lifecycle, this is a compelling benefit. The greatest part of IT is that the power keeps going up and the price keeps going down. FMV leases offer the lowest payment option since you’re only paying for the use of the product, not the purchase price. Payments are usually referred to as rent. Continue Reading…

Mastering SMARTnet renewals in 4 easy steps

Posted by at 9:37 AM

Cisco SMARTnet Cisco’s SMARTnet technical support service is renowned for its hotline of Cisco engineers ready to help troubleshoot. After all, even IT teams have to call tech support every once in a while, especially when those teams protect complex and critical systems. And the award-winning service lives up to its reputation for slashing downtime.

But to maintain service for all Cisco equipment in use, organizations need to keep a close eye on their contracts and upcoming renewals to ensure there are no gaps in coverage. And too often, renewals become a challenge for many organizations. Many companies hold between 10 and 15 SMARTnet contracts for various Cisco devices. And with so many contracts, businesses struggle to keep track of important expiration dates, terms, and conditions.

No IT team wants to find out their SMARTnet contract has unexpectedly lapsed while on the phone with Cisco to get a system back up. But due to lack of contract visibility, organizations sometimes falsely assume their business-critical devices are secured by SMARTnet. Due to unpaid renewals or missing agreements, devices can slip through the cracks, risking downtime and other damaging network issues.

Just as harmful, many organizations continue to pay SMARTnet subscriptions for out-of-date or unused devices due to knee-jerk renewals on forgotten contracts. And as organizations grow and add more Cisco services and devices, the complexities associated with managing new subscriptions will only escalate.

For organizations seeking greater visibility into their SMARTnet services, here are four easy tips to regain control over contracts. Continue Reading…

Microsoft’s volume licensing transformation: Here’s everything you need to know about MPSA

Posted by at 10:05 AM

Late last year, Richard Smith, GM at Microsoft Worldwide Licensing & Pricing, revealed it would be introducing a “next-generation approach to commercial licensing” to provide customers a more flexible and simplified purchasing experience across all solutions. Dubbed by Microsoft as Next Generation of Volume Licensing (NGVL) or transformation of volume licensing, the initiative takes a multi-phased approach, which began and will continue to be driven by feedback from the different licensing communities–partners, customers, and Microsoft field.

NGVL then entered the pilot phase, for which SHI was proud to be one of the handful of participating partners across the globe. On Dec. 1, 2013 the initiative reached its current phase, a controlled, but broader, launch. This current phase is not the final product. We will likely see the transformation continue for some time to come.

Today’s offering, the Microsoft Products and Services Agreement (MPSA), is simple but clearly displays the three primary tenets of the transformation. Continue Reading…

3 tech megatrends that will redefine business in 2014

Posted by at 8:58 AM

Gartner identified 10 strategic technology trends for 2014 at a symposium last fall, including mobile, the Internet of Everything, and cloud technology. As we enter 2014, several megatrends stand out from the rest, shaping the way we do business and accelerating the transformation of IT. It’s important to understand these trends beyond the buzzwords and marketing lingo. The key to preparing for tech’s imminent shift is recognizing the business drivers behind these changes and acknowledging their impact on the future of business.

Here are the megatrends that should be top of mind for IT departments and business owners alike:

Software-defined anything (SDx)

The traditional datacenter landscape has changed forever, leaving infrastructure abstracted and virtualized, delivered as a service. We’re seeing virtualization extend well beyond just computing, with storage and network virtualization quickly becoming the norm for most organizations.

This model holds true regardless of whether the infrastructure resides internally or in the cloud. Dependency on physical hardware is being eliminated as software manages everything, increasing flexibility and agility. As infrastructure becomes highly virtualized and moves toward the private cloud, traditional IT resources need to evolve or risk becoming irrelevant.

As businesses begin to consume infrastructure as a service, the skills required to architect and support these environments must evolve as well. Once infrastructure is fully abstracted and optimized, organizations can shift their focus to developing applications to support business outcomes. Continue Reading…

Putting the value in value added reseller: Why both manufacturers and customers rely on VARs

Posted by at 10:54 AM

Many organizations struggle to keep tabs on their IT assets. The number of products, manufacturers, and licensing agreements is enough to make any person’s head spin. That’s why most companies use some sort of IT asset management (ITAM) to keep track of the various renewal dates and understand what licenses they have on hand. But even then they have little strategic direction for their licensing.

Software manufacturers too have their work cut out for them. They can’t afford to spend the time and money to find every potential customer for their software. In order to earn a reasonable profit on their products, they need a base of customers and a dedicated sales force.

To make the landscape more manageable for both the manufacturers and their ultimate customers, value-added resellers (VARs) serve as a liaison, helping manufacturers get their software in users’ hands while offering customers a range of manufacturer and software options that best fit their business objectives.

It’s too difficult for one customer to attain knowledge about every manufacturer, product, and licensing option on the market, just as it’s nearly impossible for manufacturers to gain clear insight into customer markets and needs. Since both spheres are so vast, VARs meet in the middle to fill the gap.

Value add for customers

No organization looking to license software or hardware has the time or resources to research every potential manufacturer’s products and compare the costs and benefits. VARs, on the other hand, have staffs devoted to staying up to date on the products available, as well as the nuances of every agreement. When customers work with VARs, they receive advice on which manufacturers and products can best support their goals, as well as guidance on manufacturer pricing. Continue Reading…

3 reasons external software asset management services prevail over in-house solutions

Posted by at 12:22 PM

There’s no denying that software asset management (SAM) is important. It prevents overspending and compliance breaches, and helps organizations anticipate IT needs. But how to actually handle SAM is a different story. Should an organization build an in-house software asset management (SAM) solution or outsource those services?

I recently received an email from a customer asking me just that. I should say up front that as an employee of a company that offers outsourced SAM services, I might be a little biased, but after ruminating on the question, I can only conclude that outsourced SAM services are the way to go for most organizations.

Granted, customers that opt for a tool-based, in-house SAM solution do gain greater control and retain privacy over their assets, but the costs quickly outweigh the benefits. These solutions take up the valuable time of existing IT workers and are difficult to manage without the right training and expertise. The only organizations capable of balancing these tasks are ones large enough to sustain and balance a licensing team, and not all companies have that luxury.

The instant a customer purchases a piece of hardware or software title, it’s bombarded by additional support needs, including:

  • Solution software (the direct cost of the software)
  • Deployments for production, test, backup, and other uses
  • Hardware dependencies
  • Supporting software (operating systems, virtual machine licenses, database licenses, etc.)
  • Software maintenance (for solution and supporting software)
  • Implementation (consulting support for installation, customization, integration, and training)
  • System administrators (primary and backup administrators, training, turnover, etc.)

To save the headache, customers can opt for an outsourced and integrated SAM solution that manages all of their critical software assets without wasting valuable time and resources. Here are three reasons why it’s well worth a customer’s time and money to choose an SAM service to manage its software assets: Continue Reading…

How to get your maintenance renewals under control

Posted by at 5:50 PM

If your organization always wants the latest and greatest products and most up-to-date support, chances are you buy your software and hardware maintenance from various manufacturers. The question is: How do you manage all of your purchases while ensuring you’re not overspending?

Renewal management can be complicated, involving a kaleidoscope of factors that can turn a simple process into a field full of potential land mines, including overspending and non-compliance. Here are some of the challenges IT organizations face while managing renewals and how to solve them.

1. Myriad buying programs. Every business unit has its own unique mix of hardware and software needs. When it comes to licensing Microsoft products, for example, some organizations excel with an Enterprise Agreement (EA) to license a particular number of seats at any time for any product. Other organizations utilize a Select Agreement to buy what they need when they need it. With other publishers, some parts of your organization might still rely on perpetual licenses while others need options like the subscription-based Adobe Creative Cloud. The range of potential ongoing agreements in any company is vast, and renewal dates are unlikely to align, creating the potential for under-licensing or budgetary “gotchas” if the various renewal dates aren’t closely tracked.

2. Multiple employees managing buying programs. Larger organizations have licenses with more manufacturers and for more products than any one person can manage alone. Of course splitting the workload, whether by division or manufacturer, reduces visibility into organization-wide renewal dates. Having employees manage licensing in a silo also limits potential cost-savings and cost-avoidance advantages for future licensing, as employees might not be aware that their combined purchases qualify them for the next level (price break) of cost-savings. Continue Reading…