The third-party hardware maintenance market is highly fragmented, but consolidation is occurring as providers expand into new geographies and across technologies. This means more choice for sourcing and vendor management leaders looking to implement global hybrid maintenance coverage.
OEM support spending can be reduced by leveraging a blend of OEM and TPM maintenance together in a hybrid solution. Third-party maintenance (TPM) contracts will offer customers an average of 60% savings off OEM support list prices.
More than 10 million data center/network devices are being maintained by a TPM. The OEM or authorized channel partners often support newer, software-patchable hardware, and the TPM services primarily postwarranty equipment.
End users can purchase OEM-independent support from a TPM directly or from a growing number of system integrators, managed service providers and value-added resellers that have developed commission-based relationships with OEM-independent TPMs.
Sourcing and vendor management leaders maturing the IT asset discipline can optimize hardware maintenance spend by:
Performing a maintenance optimization audit. Rather than conducting this audit entirely by themselves, they should leverage the expertise of TPMs. All TPMs will do this in a consultative fashion, and a number of TPMs have built automated analysis tools that arm sourcing and procurement professionals with information they need to make informed recommendations to their internal constituents about OEM support versus TPM maintenance, and critical information about software license and update entitlements and end-of-service life data.
Securing references from TPMs that are relevant — customers of similar scale that leverage the TPM provider for the same OEM's equipment supported in the same geographical region. Vertical-specific matches are a bonus.
Using a hybrid maintenance strategy that combines secondary hardware, OEM-maintenance, OEM-independent TPM and managed spares.
By 2020, the number of TPM-related RFI/RFPs that are multiplatform/multivendor will increase by 35% as TPM becomes more mainstream and is no longer considered a point solution for servers, storage or networking.
Hardware (HW) maintenance contracts for data center and network equipment may cover:
On-site field engineering
Depending on the OEM, some customers may purchase OEM-branded hardware support directly from the OEM. However, the majority of end-user customers purchase and renew OEM-branded contracts through an authorized reseller or partner of the OEM. These authorized channel partners may also offer customers another option of support, known as co-delivery or collaborative support, where the end-user customer calls the partner for support, and the partner still contracts with the OEM for Level 3/backline support. In both of these types of authorized maintenance, the OEM benefits from revenue and margin.
The focus of this document is on the independent, third-party market for data center and network maintenance. This is maintenance provided independently from the OEMs, often referred to as "TPM" (third-party maintenance), "unauthorized maintenance" or "alternative maintenance."
A hybrid maintenance strategy — using OEM-authorized and OEM-independent maintenance — is becoming more common in the hardware support market, with a thriving ecosystem of independent support providers for server, storage and networking equipment. End-user customers are selectively using TPMs to cost-effectively extend the life of IT assets, control OEM-forced upgrades, and save money.
Third-party maintenance started becoming mainstream in 2015, continued in 2016, and is still gaining adoption in 2017. Many customers of all sizes, all geographies and all verticals are using TPM for some devices. Currently, Gartner estimates there are more than 10 million data center/network devices under TPM, and 71% of very-large enterprise customers leveraged a TPM for support of some devices in 2016.
The focus of this document is on data center and network TPMs. However, it should be noted that there is also growing end-user interest and adoption in software TPM. In particular, Origina, Rimini Street, and Spinnaker Support are notable vendors in the software TPM market (see "What Rimini Street and Spinnaker Support Are Doing to Support Oracle and SAP ERP Products" ).
Some of the benefits sourcing and procurement professionals have realized by leveraging TPMs include:
Hard dollar savings — Hardware maintenance is increasingly being considered as "nonstrategic IT" spending and procurement, with the result being that organizations are seeking low-cost alternatives to expensive OEM contracts and pricing. TPM contracts will offer customers an average of 60% savings off OEM support list prices. However, depending on equipment type, location and product density, Gartner has seen that the range of savings with TPM contracts is 50% off OEM list up to 95% off OEM list.
Escaping OEM postwarranty maintenance increases — Customers will often switch to TPMs when the original warranty runs out rather than renew the OEM support contract due to significant increases in OEM postwarranty pricing.
Extending the life of IT assets — TPMs will support devices that are both postwarranty and post-end of service life (EOSL). This can provide organizations with flexibility to delay upgrade projects, especially when moving workloads to the cloud.
Flexibility in contract structure — Some enterprises consider the flexibility and customized support from TPMs as an advantage over OEM contracts in some situations. For example, OEMs will typically not entertain renewing a contract that is for less than one year. A TPM, on the other hand, is typically willing to go month-to-month to provide a customer with a short-term contract, for example, for nine months.
The two most frequently mentioned caution areas that sourcing and procurement professionals must consider when leveraging TPMs include:
Fragmented market of providers — Many are regional in nature, so the market can be cumbersome to navigate. There are some providers that operate without having parts/logistics and engineers, and use subcontracts for many technologies. Due diligence is suggested to ensure you are with a viable provider. Reference check for the specific vendors' equipment that you are looking to maintain (in other words, talk to references for a TPM that is supporting the specific vendor's model equipment you are looking to support). In addition, it can be difficult to analyze financials — almost all TPM companies are privately-held companies.
Software licensing/updates — The lack of clarity/uniform messages in information regarding software access rights can be confusing for end users, and special attention to individual OEM policies must be paid. In addition, "SW only" bids for firmware/microcode can be very expensive if needed down the road. Also, OEMs can implement a recertification fee/relicensing fee if you decide to go back to OEM maintenance.
This document focuses on third-party maintenance.
As shown in Figure 1, TPM is offered by four types of providers:
Secondary hardware TPMs
TPM selling agents
The focus of this document is on the first two: pure-play TPMs and secondary hardware TPMs.
CSPs = communications service providers; SIs = system integrators; TPM = third-party maintenance; VARs = value-added resellers; OEMs = original equipment manufacturers
Source: Gartner (August 2017)
TPM services are delivered by primarily two types of providers: pure-play TPMs and secondary hardware TPMs, which we define below. Both types of providers offer TPM across server, storage and networking equipment, and commonly compete against each other.
Pure-play TPMs — Primary line of business is TPM. These independent support providers do not have a secondary hardware business. They may have field engineers, but not all do. Some pure-play TPMs only focus on providing Level 3/backline support in-house and leverage partners for field engineering. All pure-play TPMs will have technical support staff, though some may leverage a specialized pure-play TPM for certain technologies, particularly enterprise storage. Pure-play TPMs have the capability of managing spare parts, including testing and distribution via central and remote stocking locations with varying degrees of sophistication. Few have remote monitoring capabilities across platforms, and some have native remote monitoring functionality within network, server and storage products. Most pure-play TPMs will also offer a suite of data center professional services.
Secondary hardware TPMs — Primary line of business is secondary hardware sales. These independent support providers focus on secondary hardware resale business and also provide technical support for network, server and storage products. Realizing that managing parts and logistics is a key factor to success in the TPM market, many secondary hardware resellers have started TPM practices. They may have field engineers, but few do. Most use partners or a contingent labor force for field engineering. Most secondary hardware TPMs will leverage TPM partners for Level 3/backline support, particularly enterprise storage. Few have remote monitoring capabilities across platforms, and some have native remote monitoring functionality within network, server and storage products. Most secondary hardware TPMs will also offer a suite of data center professional services.
Sourcing and procurement managers may also consider purchasing TPM indirectly through TPM aggregators or TPM selling agents. These are providers that do not deliver TPM services directly, but resell them.
In this document, we profile a TPM aggregator. We do not profile a TPM selling agent, because there are hundreds of value-added resellers (VARs) and independent agents that sell TPM services and take a commission. Sourcing and procurement managers should investigate if VARs they currently do business with do or do not have relationships with TPMs, and if so, with what providers.
TPM aggregators — Although these providers do not provide third-party maintenance directly, they sell third-party maintenance provided by others — both pure-play TPMs and secondary hardware TPMs. They do not have field engineers or technical support staff, do not own parts, and most do not have remote monitoring capabilities. These can be consultants/brokers that develop commission-based relationships with the TPMs, but add value through consultative maintenance optimization engagements. They can also be vendors that have developed tools to evaluate and offer hybrid maintenance recommendations to clients and then fulfill the recommendations based on predefined partnerships with TPMs based on platform, geography and customer fit.
TPM selling agents — TPM selling agents do not provide TPM services. They merely act as a sales agent, taking a commission from a TPM. These providers can be system integrators (SIs), VARs, managed service providers (MSPs) or independent consultants.
Table 1 shows the vendors profiled in this Market Guide by provider type.
Type of Provider
Essintial Enterprise Solutions
Solid Systems Global
SSCS Global IT Services
Park Place Technologies
TERiX Computer Service
Secondary Hardware TPM
Atlantix Global Systems
TPM Selling Agents
None profiled. Can be system integrators, value-added resellers, managed service providers or independent consultants.
Source: Gartner (August 2017)
The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to provide more understanding of the market and its offerings.
The following profiles represent a cross-section of providers in the market. The providers may include some of the largest providers in the market and smaller providers across server, storage and networking technologies. The alphabetized competitive profiles list should not be viewed as a list of the top 18 providers in the market.
Atlantix Global Systems, headquartered in Atlanta, Georgia, is a secondary hardware provider offering third-party maintenance services. Atlantix is owned by the equity group Mill Point Capital (formerly Millstein & Co.), and Atlantix president Brian Glahn. Atlantix has approximately 155 employees and revenue of more than $120 million. Currently, Gartner estimates that 90% of its revenue is from its secondary hardware and IT asset disposition (ITAD) lines of business. Atlantix provides support for server, storage and networking hardware.
Atlantix competes as a global wholesale distributor of secondary market hardware in 80 countries, with a high-volume ITAD business. Atlantix provides secondary hardware to many of the third-party maintenance providers and other service providers. Atlantix offers a one-year warranty on hardware sold. Because of the size of its parts distribution globally, Atlantix has the potential to grow as a third-party maintainer. Atlantix has a number of relevant industry certifications, including ISO 14001:2004 and ISO 9001:2008, OHSAS 18001:2007 for safety and R2:2013 for electronics recycling.
Atlantix sells its support contracts, branded as Mindsafe, direct to enterprise customers and to channel partners. Approximately 80% of the equipment on Mindsafe contracts are from Cisco or Juniper Networks. Support levels, including 24x7x4 and next business day (NBD), are the most common support levels. Level 3 technical support is primarily provided by Atlantix. As with other TPMs, Atlantix may have to partner with other TPMs for Level 3 or backline support for certain storage technologies. On-site field engineering is provided using a mix of Atlantix engineers and contingent labor force engineers.
Headquartered in Norcross, Georgia, CentricsIT is a secondary hardware provider offering third-party maintenance and ITAD services. CentricsIT is privately owned by CHC Technology, and has approximately 130 employees and total revenue of approximately $82 million. Approximately 80% of its revenue is from its secondary hardware distribution line of business. CentricsIT provides support for server, storage and networking hardware, and TPM is the fastest growing piece of its business, with support for Hewlett Packard Enterprise (HPE), Dell EMC, IBM, Juniper Networks and Cisco equipment making up approximately 70% of its support business today.
CentricsIT competes by leveraging its capability and technical expertise as a global wholesale distributor of secondary market hardware and provides maintenance services to clients in more than 100 countries by accessing more than 160 parts stocking locations in 80 countries. Support contracts sold directly to enterprise customers, branded as CentricsIT Support Services, make up 40% of its support revenue. The other 60% is through channel partners, which include authorized VARs. As a direct support provider, CentricsIT focuses on midsize to large enterprises and has solid coverage in both Canada and the U.S. To support its global growth and its customers with data centers in more than one geography, it is investing in Latin America and Europe.
The CentricsIT support model is a hybrid in that it provides all the necessary technical backline support, provides all of the fully tested spares globally, uses mostly its own field engineering resources in the U.S. and Canada, and partners for on-site field engineering outside of North America. All contracts include 24/7 phone support, with on-site parts response times varying according to selected service levels. CentricsIT Support Services contracts provide a guarantee that there will be no price increase for the life of the equipment.
CentricsIT provides professional services such as wireless surveys and assessments, migration, data center relocation, global logistics, installation and configuration services. CentricsIT also is able to leverage the resources of other CHC holdings, including The Centrics Group, which focuses on IT staff augmentation, and Adapture, which is an infrastructure-, cloud- and security-focused solution provider that is an authorized partner of many vendors, including Amazon Web Services (AWS), Dell and VMware.
In 2017, Curvature and Systems Maintenance Services (SMS) merged to form SMS | Curvature, with Switzerland-based Partners Group as the majority investor. On 17 July 2017, SMS | Curvature was officially rebranded under the name "Curvature" as a newly integrated company.
The company will maintain two headquarters, one in Charlotte, North Carolina, and one in Santa Barbara, California. This merger created the largest provider of secondary hardware and third-party maintenance (TPM) globally with more than 2,000 employees, $545 million in revenue, 600 parts depots and a combined 1.25 million devices under support.
Prior to the merger, Systems Maintenance Services (SMS) was a global third-party maintainer. Approximately 75% of SMS's revenue was from data center/network third-party maintenance with nearly half of its revenue from HP Inc. and IBM support. It also has a sizable amount of Dell EMC under contract. Curvature was a secondary hardware provider offering third-party maintenance services, branded as NetSure. Prior to the merger, 85% of Curvature's premerger TPM business was on Cisco equipment.
The merger overall is geographically advantageous for both firms. Curvature had invested most heavily in the Netherlands, France, Japan, Singapore and India, while SMS had invested in other areas of Europe such as Denmark and the U.K. as well as in Singapore, Hong Kong, Malaysia and Thailand, and with more than 300 associates in China.
Curvature's model was to use subcontracted field engineers while SMS's model was to leverage its own on-staff field engineers heavily. As a combined entity, Gartner expects the company will further leverage its own field engineers, while maintaining an ecosystem of subcontractors for on-site service at times.
Gartner expects the company will continue aggressive end-user sales of both secondary hardware and TPM direct to end-user clients. Curvature has a tool branded as ClearView to provide prospects and customers with objective recommendations to optimize maintenance spend across all platforms supported.
Service levels for TPM include 7x24x4, 5x9x4 and next business day (NBD) options, and dedicated on-site support, and these service levels will leverage complementary technical services in the context of the relationship. The combined firm supports HPE, HP Inc., IBM, Dell EMC, Cisco, Hitachi, NetApp, Oracle (Sun Microsystems), Lenovo and Quantum as well as numerous second-tier brands including white-box infrastructure.
For storage, Curvature will primarily use its own technical support resources for most products (for example, EMC CLARiiON/VNX, VMAX; NetApp Filer; Hitachi RAID storage), but as with other TPMs, it does need to leverage some Level 3/backline support from niche storage software vendors.
Curvature's customer-facing portal is branded as singlePoint, which is a live incident management system that lists inventory of assets under contract. Customers have the ability to manage contracts online and track assets not under contract with Curvature.
In addition to TPM, Curvature provides remote monitoring services and has a professional services suite of offerings, including data center installations, moves, adds and changes (IMAC)/remote hands, relocations, migrations/consolidations, secondary hardware sales, and IT asset disposition (ITAD) services.
CXtec is a secondary hardware provider offering third-party maintenance, ITAD services and professional services such as installation, staging and configuration. CXtec is headquartered in Syracuse, New York. CXtec and its sister company Teracai, a Cisco partner, were purchased by H.I.G. Capital in August 2016. CXtec has approximately 250 employees and revenue of approximately $90 million. CXtec's TPM revenue is approximately $5 million.
CXtec's secondary hardware business is focused on networking and communications equipment including switches, routers, wireless components, and network optics, as well as phones, headsets and other voice technology from manufacturers such as Cisco, Avaya, HPE, Polycom, ShoreTel and Plantronics. It maintains a 70,000-square-foot facility in Syracuse with 40,000 square feet of finished goods stock. This represents an estimated $8 million in finished goods inventory.
CXtec operates three lines of business: equal2new, which focuses on secondary hardware sales; CABLExpress, which focuses on cabling; and RapidCare, which is its TPM offering.
CXtec's RapidCare provides NBD advanced replacement TPM support for network devices, primarily Cisco. It also provides support for other networking products, including 3Com, Aastra Technologies, Adtran, Aruba, Avaya, Mitel, Nortel Networks, Polycom, ShoreTel, Transition Networks and Brocade. At this time, CXtec does not provide support for server and storage platforms. CXtec works to remediate network production issues in its fully functional lab environment, where it recreates customers' production issues and provides root cause analysis.
All testing is performed in an electrostatic discharge (ESD) protected environment to prevent latency issues from static discharges. CXtec's process is governed by a quality management system that is ISO 9001:2008-certified. For all network hardware, CXtec uses a fully automated software process to test products at the component level, and its WAN/LAN emulator rigorously simulates production stress and load. CXtec load tests every port by passing traffic over multiple ports and virtual LANs (VLANs) simultaneously via a proprietary WAN/LAN simulation engine. This process performs traffic generation at up to 95% of the manufacturer-rated speed using trademarked traffic generators.
The equal2new warranty is a true lifetime warranty for the length of the time a customer owns the product. Advance replacement is also for the life of the product. CXtec pays for all shipping costs. The warranty is on a unit basis, not a component basis, simplifying the replacement process for CXtec's customers.
EmconIT is a pure-play third-party maintainer headquartered in Brick, New Jersey, and is a privately held company owned by CEO Michael Gnapp and private investors. EmconIT was founded in 1987 and today has approximately 40 employees and has revenue of less than $10 million. Approximately 90% of its revenue comes from services, which is EmconIT's core focus. Of those services, 80% are focused on storage and servers, and the remaining balance is on networking equipment. NetApp, Dell EMC, HPE and Hitachi account for approximately 60% of the revenue and devices maintained. In particular, EmconIT supports HPE 3PAR and HPE EVA storage arrays. It also supports equipment from Oracle (Sun Microsystems), Fujitsu, Cisco, Brocade and others.
EmconIT is a regional U.S. provider of TPM services with 90% of its revenue based in the U.S. The company also provides consolidated, strategic support for its domestic clients with global reach.
EmconIT competes as a TPM data center service provider focused on services to maximize savings and support efficiencies. EmconIT's model is to leverage all of its own back-end Tier 3 remote technical engineers who are qualified subject matter experts (SMEs) with complete capabilities of providing OS-related help desk issues. Back-end technical support is provided directly by EmconIT for the majority of the products it services. Spare parts and field engineers are managed internally along with additional field engineer (FE) subcontractors used in certain geographies. EmconIT maintenance is offered in customizable tiers, ranging from 8x5xNBD to 7x24x4, which allows it to tailor specific customer solutions and budgets.
EmconIT sells both directly to end-user clients and channel partners, with 55% of revenue derived from direct sales, 20% as a subcontractor to other TPMs, and the balance through OEM relationships or agent programs. EmconIT's strategy is to target midtier to large global companies. It directly services a broad range of clients, including telecom, technology sector, government agencies and the healthcare industry.
Essintial Enterprise Solutions is a pure-play third-party maintainer headquartered in Mechanicsburg, Pennsylvania. Essintial is privately held by The Gores Group with approximately 285 employees and revenue of $50 million. Essintial operates five TPM lines of business: data center, retail, printer/personal systems, banking and project solutions. Data center is the largest business at approximately $20 million. Essintial's footprint of data center devices under support is exclusively North America. Sixty percent of devices supported include HP Inc., Dell, Oracle (Sun Microsystems) and IBM.
Essintial competes as a full-service data center support provider. Essintial supports its field force via an onshore 24/365 Technical Assistance Center. Support levels include 24x7x4 and NBD, and can be customized for customers, including with a two-hour, on-site response. It is highly supportive to organizations with a high percentage of end-of-life devices. The Essintial parts model is to maintain control of its parts stocking, but not to own the inventory, using a pure usage model. In 2015, it began an exclusive relationship with Essential LifeCycle Services (formerly PC Parts) of Harrisburg, Pennsylvania, to take on ownership of Essintial's parts. This relationship leaves Essintial with no carrying costs for inventory, but gives it access to inventory, at which time it pays for the parts. All inventory is prepositioned in Essintial forward stocking locations, backed by a strategic alliance with FedEx Global Supply Chain Services in accordance with minimum and maximum thresholds managed by Essintial.
Essintial leverages its Managed WorkForce methodology for on-site field engineering services, which is a combination of full-time employee and contingent labor resources. Essintial invests in analytics and automation, such as technical routing software, that help it meet customer demands at the best cost.
Essintial provides support contracts direct to enterprise customers, which make up two-thirds of its TPM business. It also provides support to other third-party maintainers and through OEM relationships as a subcontractor.
Evernex is a secondary hardware provider TPM, headquartered in France. Evernex, formerly IB-Remarketing, rebranded in 2017. In 2015, private equity firm The Carlyle Group took a majority ownership position. The company has 400 employees and $171 million in total company revenue for 2016. Third-party maintenance and the related "Spare as a Service" (SPaaS) revenue accounts for approximately $72 million.
Today, the company has a presence on five continents, has 26 offices, and has 330 forward stocking locations. Evernex's strategy has been primarily organic growth, opening offices country by country. Today, Evernex has offices in Australia, Brazil, Egypt, France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, Morocco, Nigeria, Pakistan, Poland, South Africa, Spain, Thailand, Turkey, United Arab Emirates, the U.K. and the U.S. Evernex will open offices in Chile and Romania in 2017. Evernex has performed several acquisitions over the years, including most recently France-based Nexeya Services in October 2016 to augment its maintenance service capabilities in France. In 2017, Evernex acquired TTS France, an expert in magnetic and optical backup solutions, and CAT Sistemas, a Spanish secondary hardware specialist with TPM capabilities. With these strategic acquisitions, Evernex is completing its portfolio of services, including repair of tape drives and backup libraries, and further strengthens its leadership in Europe.
Evernex operates four lines of business: maintenance services, secondary hardware, ITAD/recycling and new equipment financing. Evernex has expertise across all platforms, including server, storage and networking. Evernex's largest vertical end market is the telecommunications vertical.
HPE and Dell EMC account for approximately 50% of devices supported, Cisco 20%, then IBM and Oracle (Sun Microsystems) for the remainder. Evernex sells both directly to end users and through channel partners, which include system integrators, IT OEMs, telecom OEMs and VARs. Evernex maintains 10 24/7 call centers and does not outsource technical support at any level to other providers. For field engineering, Evernex may leverage local service providers, but does not leverage other TPMs. Standard SLAs are: 24/7 6-hour call to repair (CTR); 4x7x24 tech/part on-site; 8x7x24 tech/part on-site; 4x5x8 tech/part on-site; NBD tech/part on-site; or any of the previous SLAs as parts/back-end support only (removing the labor component).
Within the Evernex secondary hardware line of business (its "Spare as a Service"), all parts provided by Evernex are OEM genuine parts and approved replacements (either the identical part number or the OEM authorized alternative). Evernex has a large ITAD practice and recycling facility. Evernex holds a large stock of spare parts — more than 550,000 — all of which are tested in its testing facility in Aulnay-sous-Bois, France, prior to shipping to its deployed forward stocking location warehouses globally. Testing records are maintained in its proprietary in-house system.
ISC Group is a pure-play third-party maintainer headquartered in San Diego, California, with offices in Mexico City, Mexico, Monterrey, Mexico and Sao Paulo, Brazil. ISC provides storage, server and switch third-party maintenance services. ISC is privately held since 2003 by Steven Bucher, Joel Chait and Ivan Fux. ISC has approximately 17 employees and revenue of less than $10 million. Nearly all revenue is from modular and enterprise-level data storage support; however, it is growing into the server and switch TPM business. More than 85% of ISC's TPM revenue is distributed across wide-ranging sectors that include: chemical, retail, automotive, financial, telecom, healthcare, agribusiness, pharmaceutical, biotechnology, energy, manufacturing and government contracts.
ISC competes as a TPM data center maintenance provider with a specialty in Level 3/backline storage support and remote monitoring in North America, Latin America (LATAM), Europe, and several Asia/Pacific (APAC) regions. It also has professional services capabilities, for example, decommissioning, removal, destruction and data center moves.
Many other TPMs leverage ISC as a partner for Level 2, Level 3 and backline support, and remote monitoring solutions for Hitachi-HPE, NetApp, Dell EMC and Oracle (Sun Microsystems) equipment. ISC developed its remote monitoring software solution (branded as ISC-CHS), and is branching out to license the multiplatform to global end users and partners. Technical support is exclusively by ISC; it does not have to leverage other partners for support.
ISC maintenance is offered in multiple tiers (7x24x4, 5x9x4 and NBD), depending on needs of the customer. For customers with their own technical staff, ISC will provide parts, 24/7 technical support and remote monitoring. For customers without their own technical resources, ISC will provide parts, 24/7 technical support, remote monitoring and field engineering.
Maintech is a pure-play TPM that supplies outsourced data center services. Headquartered in Cranford, New Jersey, Maintech is privately held, and after being owned by Volt Information Sciences since 1980, it was sold to Oak Lane Partners in 2017. Oak Lane Partners also acquired independent service provider DecisionOne in 2015, and as a result DecisionOne and Maintech will operate as sister companies going forward. Maintech has approximately 575 employees and total revenue of $92 million. Maintech operates four lines of business: IT as a service (ITaaS), data center services, desktop services and project services. Data center services account for 75% of its revenue. Ninety percent of devices supported are in North America; however, Maintech does provide support for some Europe and Asia/Pacific headquartered companies, and for some U.S. customers with devices located in both Europe and Asia/Pacific. Maintech is currently operating in 14 countries.
Maintech competes as a full service data center outsourcing company, specializing in the financial services vertical. Its primary target customer is banking and brokerage firms with global data centers. Outside of banking and brokerage, its secondary vertical focus areas are manufacturing, telecommunications and distribution.
Maintech provides some support for networking hardware, but its focus is as a mainframe/server specialist, with 70% of its TPM revenue concentrated on HP Inc., IBM and Dell. Maintech is able to offer customers a range of data center services, including ITaaS, moves, migrations, remote monitoring and staff augmentation.
The Maintech model is to provide most of its back-end support and maintain control of its parts stocking. It leverages some partners for technical support for some storage and networking devices, as well as for some on-site field engineering services. Maintech has three Network Operation Centers (NOCs): one in Orange, California; one in Cranford, New Jersey; and one in Bangalore, India.
Maintech sells its support contracts directly to enterprise customers and through reseller channels targeting large multinational enterprises. Maintech also provides support to other third-party maintainers and to OEMs as a subcontractor to support OEM third-party maintenance offerings. Support-level SLAs are highly customizable depending on client needs.
NorthSmartIT is a TPM aggregator headquartered in Plymouth, Minnesota. NorthSmartIT is privately held by Robert Bernu and Hugh Voigt. NorthSmartIT is a division of the VAR, Northland Systems. NorthSmartIT has approximately 20 employees and $9 million in revenue.
NorthSmartIT competes as a multivendor IT maintenance aggregator. As an aggregator, it partners with authorized channel partners to sell OEM maintenance and with TPMs for non-OEM alternative maintenance.
NorthSmartIT does not deliver services, including technical support and field engineering, on its own. It accomplishes service and parts delivery by setting up master service agreements with TPMs across 400 technologies.
NorthSmartIT maintains direct dispatch capabilities through a multivendor portal that enables clients to manage every asset, ticket, location, OEM, service provider and budget on a single platform, regardless of who the asset was purchased from and regardless of who is providing service on that asset, even if it is not NorthSmartIT.
NorthSmartIT also offers asset management as a service (AMaaS), which provides clients with an automatic, proactive update process of the data in the portal for moves, adds and changes (MACs), as well as service and support options. NorthSmartIT's updating process allows for the ongoing management of assets, contracts, service providers, contract terms and potential cost savings across 400 OEMs on a continual basis. In addition to selling directly to enterprises, NorthSmartIT also white-labels its service to other VARs, resellers and aggregators.
OSI Hardware is a secondary hardware provider, with a developing network TPM practice. OSI is headquartered in Santa Barbara, California. OSI is privately held and founded by Christian Saunders, Joey Leonard and Jordan Quivey. OSI has approximately 53 employees and total revenue approaching $40 million per year. Approximately 95% of its revenue is currently from secondary hardware sales. Networking equipment accounts for 90% of sales, while servers and storage account for 10%.
At this time, OSI is considered a U.S. regional provider.
OSI competes as a secondary hardware provider and TPM, selling both directly to enterprises and through channel partners. In addition to its headquarters in Santa Barbara, it has multiple sales offices, including in San Francisco, Los Angeles, Phoenix, Dallas and Denver, and an international headquarters in Amsterdam. OSI has access to more than 330 parts depots through partners.
OSI maintenance is branded as Systain and is offered in multiple tiers, ranging from 8x5xNBD to 7x24x4. OSI's TPM offering today is extremely network-focused, with Cisco and Juniper Networks equipment accounting for nearly all TPM revenue. OSI's model is to leverage other providers for field engineering services. Technical support on networking equipment is primarily provided by OSI. As OSI grows its TPM practice into the server and storage space, it will have to partner with other niche TPMs for Level 3 or backline support for certain technologies.
OSI secondary hardware comes with a lifetime warranty.
Park Place Technologies is a pure-play TPM, headquartered in Cleveland, Ohio. Park Place is privately held by Chicago-based investment firm GTCR. Park Place has approximately 873 employees and June trailing 12-month revenue of $173 million. Park Place is a storage and server TPM, with the majority of its revenue from Dell EMC, HPE and IBM support. Most devices that Park Place currently supports are in North America; however, the firm has established direct operations in Europe and Asia/Pacific to both strengthen support for U.S. customers with devices outside of North America and drive organic growth globally.
Regional offices include Denver, Colorado, Toronto, Canada, Vancouver, Canada, London, U.K., Frankfurt, Germany (EMEA), Kuala Lumpur, Malaysia, and Singapore (Asia/Pacific), and a European distribution center in Amsterdam, the Netherlands. Additional parts distribution and sales/service centers are located throughout each region. Park Place's global operations/contact center is located in Marlborough, Massachusetts.
Many VARs are now forging commission-based relationships with TPMs to support their client bases. Park Place has been successful with these relationships, with the channel accounting for nearly 50% of its revenue, derived from more than 100 channel partners. Park Place also sells direct to enterprises.
Park Place continues to expand globally and organically through partner relationships and by continued targeted acquisitions. Park Place has an aggressive acquisition strategy. In 2016, it acquired Ardent Support Technologies, a pure-play, third-party maintainer headquartered in Dover, New Hampshire. Ardent focused as a storage specialist, with two-thirds of its revenue from EMC, HPE and NetApp support. Ardent provided Level 3 support on equipment that many other TPMs do not support, but still take on a contract and outsource to a provider such as Park Place. Examples of such equipment include EMC (VMAX, Isilon, DMX, Data Domain), HPE (3PAR, XP) IBM (XIV) and Hitachi (USP, USP/V, HUS, AMS).
Park Place's acquisitions also indicate a focus across Europe, the Middle East and Asia. In 2016, Park Place acquired Com-Com, a London-based data center TPM. In 2017, it acquired Prestige Data Centre Solutions, also a U.K.-based provider and completed a carve-out acquisition with Performance Data, a global IT services provider headquartered in Wilmington, Delaware, with offices in Singapore and Malaysia. In August 2017, Park Place acquired Allen Myland, Inc. (AMI), a Pennsylvania-based data storage maintenance firm.
Also in August 2017, Park Place acquired NCE Group Limited (NCE), Park Place's largest acquisition to date. NCE was a pure-play third-party maintainer with its U.S. headquarters in El Cajon, California, and its U.K. headquarters in Calne, U.K. NCE has approximately 275 employees and revenue of $30 million. Approximately 80% of its revenue is from server maintenance, and the balance is from storage maintenance. Dell EMC, HPE and IBM account for approximately 70% of the devices under maintenance. It also supports some networking equipment.
The largest direct verticals for Park Place are manufacturing and healthcare, but the company has a client base across all vertical industries. The Park Place support model is to provide all of its own back-end support and maintain control of its parts stocking. On-site field engineering services are provided by Park Place employees 95% of the time.
Service levels for TPM include 7x24x4, 5x8x4 and NBD options. In addition to Dell EMC, HPE and IBM, Park Place supports equipment from Cisco, Hitachi, NetApp, Oracle (Sun Microsystems), Brocade, Juniper Networks, and legacy systems by Digital Equipment Corp. (DEC) and Data General.
In addition to TPM, Park Place is aggressively moving to provide multiplatform remote management, monitoring, and data center optimization services for server and storage products, and professional services, including data center installation, implementation and relocation, and ITAD services — including on-site drive erasure/shredding and logistics services.
Procurri is a secondary hardware TPM that offers third-party maintenance and other professional services in 90+ countries. With its global headquarters in Singapore and its U.S. headquarters in Norcross, Georgia, Procurri has 15 global offices, more than 380 employees and close to 800 global forward stocking locations. Total 2016 company revenue was $135.8 million Singapore dollars, of which about 16% came from TPM. This figure is expected to increase with revenue contribution from Congruity for 2017 onward (see below).
In 2016, Procurri acquired EAF Supply Chain Holdings Limited, a TPM provider in Europe with customers that include large OEMs such as HPE, IBM, Dell EMC and Fujitsu. Additionally, Procurri recently opened a new office in India to cater to its channel partners that want to grow their global footprint into Asia/Pacific.
In January 2017, Procurri and Congruity announced a joint venture which consists of Procurri purchasing a 51% stake in Congruity's third-party maintenance and preowned hardware business units. Procurri has an option to purchase the other 49% in the future. Note that Congruity did not sell its VAR business or data center in Fall River, Massachusetts; the data center is privately held by Congruity360, a solution provider for complete data life cycle management.
Procurri's model is to sell its products and services through its channel partners, instead of directly to enterprises. Primary customer targets are VARs, OEMs, MSPs, system integrators, cloud providers, communications service providers and hardware brokers.
Fifty percent of devices under TPM are in North America, 30% in APAC, and 20% in EMEA. Dell EMC accounts for 40% of its TPM revenue, with IBM, NetApp, Hitachi, HPE and Cisco accounting for the remaining 60%.
Procurri has its own network of field engineers, as well as leveraging a partner network. For technical support, it mainly uses its own Level 3/2/1 engineers, which includes Congruity.
Service Express is a pure-play third-party maintainer headquartered in Grand Rapids, Michigan.
Service Express is privately held by Pamlico Capital, and has more than 400 employees and revenue of $100 million. Service Express' focus is support for multivendor mainframe-, midrange- and Intel-based server, storage and network environments, with HPE, IBM and Dell EMC accounting for approximately 85% of devices under maintenance. Additional services include data center relocation services, OS support, and virtualization. Service Express is primarily a regional U.S. provider.
With recent investment into the company, Service Express will expand wider into the U.S. market, both organically and through targeted acquisitions. In January 2016, it made its first acquisition, Compu-Fix, a small Pennsylvania-based TPM provider. In April 2017, it announced it acquired Delta Computer Group, a New York-based third-party maintenance provider.
Service Express competes as a high-touch, multivendor postwarranty data center maintenance (server, storage and network) specialist. Its client base is composed of all vertical industries, with the largest concentration in manufacturing and healthcare. For the majority of its customers, support is provided by Service Express engineers. Outside of its service area, Service Express leverages a contingent workforce for on-site field engineering services that accesses Service Express' systems to track and monitor calls and parts.
The Service Express model is to provide all back-end support for server, storage and networking data center environments and maintain control of its parts stocking. A proprietary contract monitoring system integrates with the parts inventory program. Customers are provided with a detailed list of all equipment on contract, as well as monitoring and tracking warranties on all their other equipment to ensure that there is never a lapse in coverage. Automatic sparing for the correct parts at the proper location for every line item that is being tracked is also a feature of the monitoring system.
Service Express' organic growth strategy consists of opening three to five brick-and-mortar U.S. locations per year. This systematic approach and increased locations provide customers with a local sales and service focus, along with a local inventory and dedicated Service Express engineers. A primary and secondary Service Express engineer for every account contributes to a 99% on-site response rate and a 94% first-trip repair success rate.
Service Express is frequently recognized with awards for its hiring practices and culture.
Service Express sells its support contracts primarily direct to enterprise customers. Support levels include 24x7x4 and NBD. However, channel partnerships account for 17% of the Service Express portfolio. Service Express partners with national hardware resellers, VARs and cloud providers to deliver postwarranty maintenance to a wider audience. Service Express does maintain partnerships to support some storage environments, for example, EMC Symmetrix/VMAX.
Solid Systems Global is a pure-play third-party maintainer that is headquartered in Derby, U.K. It has offices in Dubai, United Arab Emirates; Riyadh, Saudi Arabia; Johannesburg, South Africa; and Ahmedabad and Bangalore, India.
Solid Systems Global is privately held by its CEO and founder, Paul Lalli. Solid Systems Global has approximately 200 employees and revenue of $25 million. Approximately 90% of its revenue is from servers and storage, and the balance is from networking equipment. HPE and Oracle (Sun Microsystems) account for approximately 50% of the business. It also supports equipment from IBM, Dell EMC, and NetApp and other equipment manufacturers.
Europe accounts for approximately 42% of Solid Systems Global's business, the Middle East and Africa account for 33%, and APAC accounts for 18%.
Solid Systems Global competes as a TPM data center maintenance provider with four regional sales offices and 70 parts depots. Solid Systems Global is almost exclusively channel-focused, with 65% of revenue derived from other TPMs, and the rest of the revenue coming from relationships with OEMs, subcontractors and commission-based relationships with VARs.
Solid Systems Global also has developed direct OEM support capabilities where it is positioned to provide technical support to the OEMs' channel partners as an authorized support provider. These OEMs include D-Link, Solarflare, DDN, Huawei, Supermicro and Intel.
Solid Systems Global's model is to leverage its own field engineers as much as possible. Some additional FE resources must be used in certain geographies or on certain devices, particularly for networking. Technical support is primarily provided by Solid Systems Global, similar to some other TPMs, with Level 3 or backline support escalated to niche providers on certain technologies. Solid Systems Global maintenance is offered in multiple tiers, ranging from 8x5xNBD to 7x24x4.
Underpinning the Solid Systems Global service delivery process is its call center and help desk. This team provides Level 1 and Level 2 technical support, with escalation to Level 3 when required. The team is multilingual, servicing more than 10 languages. Solid Systems Global uses call tracking software and provides a 24/7 service. The service can be Solid Systems Global-branded or white-labeled by partners.
Founded in 1988, SSCS Global IT Services is a pure-play, third-party maintainer headquartered in Houston, Texas, providing support to 65 countries. SSCS is privately held by the president (Gahlen Carpenter) and vice president (William Olund) of the company; they are the founders of the company as well. SSCS has approximately 140 employees, its own U.S.-based 24/365 English-speaking call center and revenue of $30 million. Approximately half its revenue, from 81,000 assets under support, is from HPE and Cisco devices. It also supports NetApp, Dell EMC, Hitachi (Hitachi Data Systems), IBM, Quantum, Fujitsu and Oracle/Sun/STK. About 50% of devices supported are in North America, 35% in EMEA and the rest mostly in Asia/Pacific, with a small and growing percentage in Central America and South America.
SSCS competes as a TPM data center maintenance provider with sales and support offices in the U.S., the U.K., Germany, the Netherlands, Finland, Russia, Malaysia, Singapore and Brazil. SSCS is currently focused on organic growth. It has made significant investments in human resources, technology infrastructure and spare parts holdings — currently valued at $7 million to $8 million.
SSCS has approximately 95% of its revenue from direct engagements with end-user IT organizations and approximately 5% from subcontracted support to OEMs. Its target clients are enterprises or service providers supporting multinational IT organizations with a large amount of legacy servers and/or storage concentrated in a small amount of data centers, and many small remote locations spread around the world.
The largest verticals for SSCS are telecommunications and manufacturing, but the company has a client base across all vertical industries (including healthcare, financial/banking, energy, retail and business/consumer services). The SSCS support model leverages directly employed field staff, internal Level 3/Level 4 technical support, and a comprehensive (parts and parts analytics) logistical operation that preplaces spare parts and components to address locally supported equipment. There are specific cases where technical support is augmented by niche support organizations. Some on-site field engineering services are provided through partner relationships, particularly where there is a lower quantity of hardware assets.
SSCS third-party maintenance is branded as Solid Care and is offered in three levels: Solid Care Critical is 24x7x4, Solid Care Urgent is 9x5x4, and Solid Care Select is 9x5xNBD. Custom SLAs that include guaranteed restore times are available under SSCS's Intensive Care program.
TERiX Computer Service is a pure-play, multivendor third-party maintainer headquartered in Sunnyvale, California. TERiX is privately held by its founders. TERiX has approximately 110 employees and revenue is approximately $30 million. TERiX competes as a TPM data center maintenance provider supporting storage, networking and server products from most OEMs. More than 90% of its revenue is annuity-based, and approximately 75% of its revenue is from support of Sun, IBM, HPE and Dell products.
Oracle and TERiX were involved in litigation concerning the provision of support services for Sun and Oracle equipment. The litigation has been resolved and resulted in no restrictions to the provision of hardware break-fix services by TERiX on Sun and Oracle equipment.
TERiX competes internationally through its four related international entities (Canada, India, Japan and Singapore) and a select international partner network providing support in another 44 countries. Its annuity revenue model offers mission-critical, on-site support with flexible SLAs geared to customers' business requirements, including 24/7, guaranteed uptimes and call to repair. TERiX relies on its own distributed parts-stocking network. Most of its business is derived from the channel, including VARs, TPMs and OEMs. TERiX also sells direct to end users.
TERiX engineers are required to hold OEM-level certifications for products supported by TERiX, and all TERiX engineers are Cisco-certified.
TERiX has developed cloud-based proprietary applications specifically designed to enhance TERiX's hardware support business model. Its cloud-based proprietary ticketing system was introduced in 2002 and has been followed by a proprietary contract management system and spare parts control and management system. TERiX's proprietary call home application, Proserv, provides customers with round-the-clock fault monitoring and intelligent diagnosis of failures, which results in increased uptime and shorter time to repair. Proserv supports Dell EMC, IBM, HPE, Hitachi, NetApp, Dell and Cisco products.
The TERiX cloud-based ticketing system provides customers with real-time access to the TERiX ticketing system, including the ability for customers to open service tickets, check status, escalate a ticket's priority, and review service call history, contract status and supported products. Customers use bidirectional electronic data interchange (EDI) interfaces into the TERiX ticketing system. Multiple call centers are staffed with TERiX employees 24/7. TERiX's focus on complex enterprise and midrange devices necessitates almost exclusive use of their own highly trained full-time engineers, rather than a flexible contingent workforce.
More recently, TERiX is providing deployment services throughout North America and has been chosen to provide authorized OEM support for a major manufacturer.
The largest market verticals for TERiX are information technology, telecommunications, financial services, pharmaceutical and entertainment.
Some models supported by TERiX include: Dell EMC (VNX, CLARiiON, Symmetrix, Isilon), NetApp (Filers, V-series), Hitachi (AMS, 99xx USP/V, VSP/M VSP), HPE (Superdome, 9000 servers, ProLiant, 3PAR, XP, EVAs), IBM (x, i and p series servers, XIV, Storwize), Sun/Oracle (M9000, StorageTek SL8500, T-series), Dell (Wintel servers, Compellent, EqualLogic), Cisco (UCS blades, switches, routers, SAN devices), Juniper Networks (switches, routers) and the models of many other OEMs.
XS International (XSi) is a pure-play third-party maintainer headquartered in Alpharetta, Georgia. XSi is a privately held LLC by Bone International Holdings, which also owns AvarSYS, a Historically Underutilized Business Zone (HUBZone)-certified small business that provides maintenance and professional services to government entities. It also owns a Latin America (LATAM) ITAD business. Together, the consortium has approximately $15 million of revenue and 34 employees. Gartner estimates XSi accounts for revenue of approximately $10 million. A large percentage of devices supported are in the U.S.; however, XSi has a growing number of devices supported outside of the U.S., in Europe, Asia/Pacific and Latin America.
XSi specializes in network maintenance, and also provides support for server and storage hardware. Seventy-five percent of its revenue comes from third-party Cisco core networking gear. It also supports Cisco (TelePresence, Tandberg and Viptela), plus equipment from Juniper Networks, Broadcom-Brocade, F5 Networks, Extreme Networks (Enterasys Networks and Avaya), Riverbed and others. XSi is ISO 9001 certified, and its customers include top global 2000 companies and the federal government vertical, servicing more than 40 federal clients. Its direct coverage in LATAM and its ability to act as a subcontractor in LATAM for other providers are also differentiators, as few TPMs have coverage in the LATAM market.
In the Cisco space, XSi markets a consultative approach including a hybrid model of support where it recommends a Smart Net Total Care solution from an authorized channel partner and a TPM solution from XSi. This provides customers with access to OS from an authorized channel partner of Cisco. In 2017, XSi developed a service contract analysis tool to provide prospects and customers with a consultative approach to support by providing specific recommendations to optimize life cycle maintenance strategy. Few TPMs have such a tool. XSi's Maintenance LifeCycleSavings Tool provides organizations with customized recommendations for support, such as what devices to keep on OEM maintenance and what devices to move to TPM and the reasons why. This helps clients consider a hybrid maintenance approach with SmartNet and TPM support.
XSi has developed a customizable set of software systems and custom logistic capabilities that can be rapidly deployed, creating real-time and accurate inventory management. Customers benefit by reducing costs, improving accuracy and efficiency to provide their own critical spares depots for their key sites. This gives customers control of desired SLAs for these locations, and is beneficial for any customer who is trying to manage their own sparing depots.
XSi has approximately 80% of its business in direct sales, and the rest through its channel partners, including large government prime contractors and regional, national and multinational VARs and system integrators.
Today, the majority of hardware support services are still OEM-branded support contracts purchased through the authorized reseller channel from providers such as CSPs, SIs and VARs. However, using a hybrid maintenance strategy that combines secondary hardware, OEM-maintenance, OEM-independent TPM and managed spares is becoming much more common. Using a TPM can have significant benefits, including hard dollar savings, the ability to escape OEM postwarranty maintenance increases, the ability to extend the life of IT assets, and having additional flexibility in contract structure. The risk most commonly heard is regarding software licensing and updates.
Some sourcing and procurement professionals should work with their authorized channel partner to recommend a full menu of service levels, sparing strategies or alternative, lower cost options for support, such as TPM.
For those looking to engage with TPMs directly, the following are recommended steps:
Ask the TPM to perform a maintenance optimization audit. Leverage TPMs that have built automated analysis tools that arm sourcing and procurement professionals with all the information they need to make recommendations about OEM support versus TPM support, and critical information about software update entitlement and EOSL.
Educate your organization about OEM policies for software licensing and updates, which is the most common question you will get from IT and other business leaders. Depending on the OEM, and the device, OEM policies limiting access to firmware/microcode or forbidding the transferability of OS on hardware exist. Some OEMs offer software-only support for purchase separately.
Secure references from TPMs that are relevant — customers that leverage the TPM provider for the same OEM's equipment supported in the same geographical region and on a similar scale. Vertical-specific matches are a plus.
Start small. Oftentimes, customers "pilot" a TPM by using them just for one OEM's postwarranty equipment or just in certain locations. Once a relationship is established, Gartner has seen that customers typically will evaluate moving other OEM's equipment or other locations to the TPM. Or, the customer will move other equipment to another TPM — for example, the customer starts with network devices at a network-focused TPM and then will evaluate moving storage to a storage-niche TPM provider.
Develop a more broad hybrid maintenance strategy that combines secondary hardware, OEM-maintenance, OEM-independent TPM and managed spares.
For this research, Gartner conducted vendor briefings with all of the providers included in this research using a formal agenda guide. Topics covered on the briefings included service capabilities, investments, case studies, go-to-market strategies and service differentiators.
Gartner also conducted a survey of these providers via a detailed questionnaire. Topics covered on the survey included general company overview, financials, market vision, device counts (by OEM), SLAs, marketing, sales and channels.
In addition, Gartner conducts hundreds of inquiries each year with end-user organizations looking for alternatives to OEM maintenance. From these inquiries, Gartner is able to collect data about market demand for TPM, drivers and inhibitors for adoption of TPM, service providers being considered, and, ultimately, service providers selected. Because many of these end-user inquiries result in providing a review of a TPM's quote, analysts are also able to continually gauge market pricing.