Electronics warranties have been and probably always will be a contested item. Whether you are buying a TV, stereo, or IT equipment for your business, the decision to add an extended warranty always comes up. While the idea of protecting our recent purchase may be initially appealing, most of us will quickly decline the option to add multi year warranties to our home electronics and even home PCs or tablets. The cost of these warranties usually doesn’t make sense when compared to the price of the original item and the risk associated with the item being damaged. If your TV breaks, there is no additional cost incurred other than replacing the TV (and maybe a little frustration). However, when it comes to business class IT equipment, there are a few more factors that should be considered before deciding to pass on an extended warranty.
1. The cost of the equipment – Purchasing a business class server for the office is clearly going to be more costly than that new TV for the living room. It is not uncommon to spend $6,000 -$10,000 on a new server. Buying an extended warranty that guarantees the life of your server for 5 years starts to make more sense. Most small businesses can get 3-5 years of life from a server without having to upgrade.
2. The cost of equipment going down – When you buy a server you are trusting that equipment to run a variety of business critical systems, applications, and/or data. Therefore the warranty is not only covering the cost of the equipment but also the cost of services it provides. Should the server crash, it typically takes up to 2-3 weeks for a new server to be ordered and installed. All of a sudden the cost of the warranty seems very small when compared to purchasing another server plus recovering the cost office being down for 3 weeks.
3. Maintenance and service costs – Most business class servers not only offer a warranty of the equipment should it fail, but also provide Professional Support to ensure that any failures are resolved, sometimes in as little as 4 hours. Should the server stop working, a technician from the manufacturer will show up on site with the replacement part as well as have it it installed. Also depending on the hardware type and service package, the warranty will also include software upgrades and patches to ensure that everything is up to date.