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Time to Relook at TCO
Total cost of ownership or TCO is possibly one of the most commonly used words in the IT industry. HP ProCurve uses it too, not generally, but with specific measurable criteria. Let me give you a few examples of how we bring this about. To begin with, the way to reduce cost is to break down the various cost components of a specific technology usage and then try to see if they can each be individually reduced. For example, if we talk about the total cost of ownership of a core switch in a network, one can say that the various cost components are the cost of the product, the cost of maintaining the product, especially post warranty, the cost incurred while running any proprietary set-up connected with future obsolescence and compatibility, the cost of software updates, and finally the cost of power to run the product.
Firstly, as has correctly been argued time and again, the purchase cost of the product is only the tip of the iceberg. Assuming that we are comparing two similar products from two different companies, A & B, for argument’s sake, let us keep the initial procurement cost for both as the same.
Hence, we need to ask our customers how they are lowering or reducing their costs on the other aspects outside the immediately obvious product purchase cost.
HP ProCurve ensures a lower TCO by creating an open standards-based product line, most of which come with a lifetime warranty. Moreover, HP backs up the warranty with next business day (NBD) advanced replacement and free updates on future software releases. In addition, HP’s green products ensure energy savings of up to 45 percent and in the process further lowering the cost of ownership for customers.
Total cost of ownership or TCO is possibly one of the most commonly used words in the IT industry. HP ProCurve uses it too, not generally, but with specific measurable criteria. Let me give you a few examples of how we bring this about. To begin with, the way to reduce cost is to break down the various cost components of a specific technology usage and then try to see if they can each be individually reduced. For example, if we talk about the total cost of ownership of a core switch in a network, one can say that the various cost components are the cost of the product, the cost
In today’s competitive world, where every organization is managing costs to improve organizational efficiency, TCO is an important concept which needs to be underlined and discussed. Towards this, our esteemed channel partners are effectively taking the message across to the customers. TCO was always important, and it is even more so today.
In addition, HP today is uniquely positioned to address the diverse needs of various customers, not only from a network point of view, but also from all aspects of infrastructural needs. HP’s range of industry leading products in server computing, storage, software, and networks, ensures that customers have the best of breed working for them.
IT users will continue to look at reducing costs in these times of intense global competition, and this would imply not just the cost of procurement. TCO will be a central consideration so that the cost of ownership becomes a competitive advantage for organizations.
The old concept of adhering to a product just because it comes from an existing market leader will give way to concepts of the best techno-commercial value, and it is in this environment that HP ProCurve will make a lot of sense, both technologically and commercially.
Adding to this is the fact that the numbers talk in favor of us. To give you an example, while the Ethernet switch market witnessed a considerable drop, HP ProCurve’s sales remain fairly unaffected. This is because during the recession, our value proposition became even more evident. Customers became more cost-conscious and started naturally opting for products that offered them a better TCO.
We believe this has been considered as an important factor by our partners who have chosen to work with us. They correctly believe that they can grow along with HP ProCurve and thus they show consistent commitment towards us. This has resulted in us having numerous partners who sell only HP ProCurve products. This, in turn, gives us an advantage over our competitors in the market.
This makes us realize one thing and reinforced one of our core beliefs — if our products can give a better TCO aspect to our customers, we can definitely win.
So let us reach out to our customers and talk TCO.