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Ask Cisco: What’s the difference between a warranty and service contract?

February 20, 2012 at 8:00 am PST

Q: I have a business with 150 employees and am looking into upgrading some of my IT hardware. When evaluating products, the availability of a service contract is sometimes mentioned. If the hardware I’m purchasing already has a warranty, why would I need a service contract? Aren’t they the same thing?

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Protecting Your Business With a Service Contract

You may need more than a warranty to realize the full return on your technology investment

These are challenging economic times for small businesses. You need the latest technology in order to grow your business. But you also need peace of mind knowing that you’ll get the most value from that technology investment.

You probably believe that a warranty will provide that protection should something go wrong with one of your network devices, such as a switch or router. Not necessarily.

A warranty is not equal to technical support. Most warranties only guarantee against a defective product and provide limited support.

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Is Your Customers’ Network Covered by a “Good Enough” Warranty?

June 8, 2011 at 1:55 pm PST

When budgeting for equipment to run enterprise networks, buying equipment that requires the least amount of upfront capital may sound like cheapest in the long run, but what about the cost of repairs and tech support?

Settling for a “good enough” network means your customers get a “good enough” warranty to go with it. Next-generation networks offer more support staff, diagnostic tools to keep networks up and running, as well as more robust warranties.

In our continuing coverage of the Seven Myths of the Good-Enough Network, we delve into myth number five: The Basic Warranty Myth.

Most enterprise networking equipment includes limited support and maintenance. With vendors like HP, according to Michael Rau (myth dispeller and Vice President, CTO for the Borderless Network Architecture at Cisco), a warranty service call is limited to answering only the most basic questions. A support rep will typically ask, “Have you tried rebooting your switch?” If that’s not the issue, a replacement is sent with no effort made to troubleshoot the problem. If you want more in-depth support you have to purchase the extended support contract – which is not free.

Here are five things customers should consider when purchasing network equipment. Read More »

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The Myth of Basic Warranty: Myth # 5 of the Good-Enough Network

In this week’s installation of the Myths of the Good-Enough Network series, Mike Rau explores misconceptions that surround the basic warranty.

Mike points out that all service contracts and warranties are not created equal, especially when it comes to networking. As a rule of thumb, you get what you pay for. Unfortunately, you never realize how good a service contract is until you need it.  His recommendation:  Be prepared and look at the fine print.

Here’s a quick recap of the article.

Basic Questions Only: With “good-enough” vendors such as HP, a warranty service call is limited to answering only the most basic questions. More often than not, they will ask questions along the lines of, “Have you tried rebooting your switch?” If that doesn’t work, the vendor simply ships a replacement.

No Troubleshooting: The majority of warranties do not include troubleshooting at all. Yet network and configuration issues account for 70% of support center calls where service is often provided on a first-come first-served basis, with no effort to prioritize calls.

TCO Calculations: If a company makes that narrow calculation of upfront discounts on products and maintenance, they are not looking at the total operating environment that they’re actually creating and overall TCO.

Impact of Downtime: Companies lose an average of 3.6% of revenue per year to downtime, according to an Infonetics Research report “The Costs of Enterprise Downtime.” Unplanned downtime also damages the reputation of the business, a significant cost even if it is difficult to quantify.

Smart Services to the Rescue: To provide customers proactively identify and address network problems Cisco has invested aggressively in smart services capabilities.  These software-enabled technical and professional services proactively seek out, diagnose, and remediate issues before they even become problems. This can dramatically improve the uptime of networks as well as the user experience.

Sound interesting?  Read the full article on Silicon Angle:  Myths #5 of the Good-Enough Network:  ”Basic Warranty” Myth


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3 Things to Look for in a Service Plan

An optional service package can protect your technology investment and keep your network running

It’s happened to all of us at one time or another: A much relied upon appliance or electronic device dies the day after the warranty expires. Although annoying and frustrating, you can live a day or more without your TV, iPod, or dishwasher.

When you’re a small business, though, your network is your lifeline—it connects you to your community of customers, partners, and suppliers. Having your network go down because a key component (such as a switch, router, or storage device) has failed can cost you in lost revenue and customers as well as the price to replace the faulty equipment. By some estimates , the average financial loss due to network downtime costs companies 3.6% of their gross annual revenue.

Often, the product warranty just isn’t enough. That’s where a service plan comes in. These optional packages provide investment protection for your network and will keep it—and your business—up and running. This can be especially beneficial for small businesses that have limited or no in-house technical support.

Service packages vary in term length, coverage, and cost. Here are some things to look for when comparing plans:

Hardware replacement: When a network component fails, you want the fastest replacement possible. Look for a service plan that will deliver a replacement product the next day, at the very least; or, even better, within hours.

Software updates: Getting the latest upgrades and bug fixes keep your network devices performing at their best and reduces the risk of potential problems.

Multiple support channels: Choose a plan that provides more than one way to get the help you need, such as online chat, phone support, and a support community forum or knowledgebase.

A plan should provide comprehensive service so you get the most value from your technology investment. A service plan that keeps your network running smoothly, like Cisco Small Business Support Service, will help save you money, make employees more productive, and allow them to better serve your customers—ultimately, making your business more competitive.

What’s your experience with service plans? Share your advice with other small businesses here.

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