Gartner advises against extended IT warranties

Gartner has advised IT departments not to invest in extended warranties when buying equipment in an effort to reduce business costs and show quick savings.

Analysts Jack Heine, Frank DeSalvo and Stewart Buchanan argue in a new report that organisations should instead adopt a "replace when failed" policy for the point at which their OEM warranty expires.

"Unless an extended warranty is included at the time of initial purchase, acquiring an extended warranty after the OEM warranty expires can be expensive and, in many cases, unnecessary," noted the report.

Gartner suggests that firms should look at other methods to reduce costs, such as using third-party providers for maintenance because they tend to offer their services at half the price of OEM providers. Another suggestion is to keep components that are likely to fail over time if they are still in working order because these parts are generally more expensive.

"If these parts are still working when retired, then check whether the organisation might need them before signing them off for disposal," said the report.

Organisations could also save costs by reducing their disaster recovery portfolio and ridding it of outdated application priorities. "Ensure that only applications deemed critical by the business are backed up to expensive hot sites," the report added.

Gartner suggested that IT managers will be under pressure during times of economic downturn to allow for more disaster recovery risk if it includes an opportunity to reduce costs. The analyst firm also warned that the inappropriate use of colour printers can cause a significant rise in costs because printer chargers are based on clicks regardless of colour content.

"A common problem arises when, for physical convenience or schedule conflicts, individuals send black-and-white print jobs to the colour printer," the report said. "One easy way to address this is to have the network-submit form require a determination of colour requirements and display the cost differences."

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