Why Does the Cost Of NetApp Support Go Up Every Year?

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Posted on Friday, August 9, 2019

The annual maintenance contract, an essential aspect of NetApp storage ownership, ensures you have access to support and spares at all times. The trouble is that the contract not only costs around 20% of the original purchase price, but it also increases each year.

So why is that? Why do you have to pay more every year that you own a system that is depreciating in value?

Operating costs

Like every business, operating costs at NetApp increase year-over-year. Increasing staff salaries, general economic inflation, and rising operating costs all add to the costs of simply doing business. Naturally the OEM will want to pass on some (most) of those costs to paying customers.

But this does not explain why maintenance costs 20% of the original hardware purchase price.

The Carrot

The real reason support contracts tend to be expensive is that OEMs like NetApp use them to offset heavy discounts offered at the initial purchase. That large reduction in ticket price has to be regained somehow– and your annual maintenance agreement is where it happens.

It is entirely possible that you end up paying for your hardware twice over the course of a five-year contract.

The Stick

The other reason that maintenance contract costs increase is to make it financially unattractive to retain older storage systems any longer than NetApp deems necessary. By ramping up support costs, particularly at the end of the initial agreement, your account manager can make an upgrade seem like a good value proposition. 

After all, a new storage upgrade ties you to the NetApp product lifecycle for another three to five years.

Minimising maintenance costs

The most effective way to avoid disproportionately large cost increases is to partner with a third-party NetApp storage support provider like CDS– particularly when dealing with post-warranty hardware. We don’t sell hardware, so there are no loss leaders to recover, or a never-ending upgrade cycle to consider.

This means we’re able to keep prices low, freeing up funds to spend on other strategic projects. And we give you back complete control of your hardware stack too. To learn more about the CDS difference, please give us a call.

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