The Warranty Game

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Created on Tuesday, 22 May 2007 14:59
What are the chances the server that you are about to buy will malfunction in a year? It depends on who built the server, how it is configured and used, and how frequently and thoroughly it is maintained. But, regardless of prudence, there is always a chance that some vital component will physically fail.

So you want a warranty, eh?

Manufacturers are happy to sell you a warranty; and even if the warranty is included standard, the cost is obviously a part of the list price. The terms and conditions of warranties vary significantly, and they are usually buried in pages of fine print. Some brands are generally better than others, but often the quality of the warrantee also varies greatly within a single company's product lines. The common denominator, of course, is money; but it would be a great oversimplification to just say, 'You get the warranty quality for which you paid. For example, if you don't take the proper precautions against data loss, the best warranty will be small compensation compared to your new problem (how to recreate the accounting files, email, customer lists, etc).

The real issue is warranty service, because poor service is not worth any price; it wastes your time, which wastes your money. If you are paying a consultant by the hour to deal with a tedious warranty procedure, then the cost of the warranty is likely to be relatively insignificant compared to the consultant's invoice. Like most consultants, Allora does not warrant the products or services of third parties; however, we do warrant the quality of our own work (and our contractors), as part of our Service Agreements. And we are available to help you through any warranty procedures that you face, should you need us (it would be support labor).

If only network equipment warranties were as simple as the famous Craftsman guarantee; but a server is a lot more delicate and complex than a pipe-wrench. On some level, it is natural that warranties for technical gear are a little complex and full of conditions: it is the nature of the IT beast. We caution you against purchasing an extended warranty unless you know that it is appropriate to the situation.

What is the warranty game?

There is a disturbing downward trend in warranty quality in the computer market, which we now intend to expose. The heart of the problem lies in a few simple words, which I will quote directly from the website of a major office equipment manufacturer (emphasis mine): 'Technician will be dispatched if necessary following phone-based troubleshooting.” In other words, you must first justify your need for onsite repair to someone in a call-center, before they are obliged to send a technician with 'certified parts'. This begs the question, why should you pay for a 4-hour response time if there is such a glaring out-clause excusing poor service?

This problem is greatly exacerbated by the advent of outsourced technical-support call centers. I have nothing against Lithuanians, Indians, or any other people that are trying to make an honest living; but it is a fact that outsourced labor costs a lot less than your time costs, if you're living in America. The patient gentleman on the other side of the phone (and world), is happy to continue running you through troubleshooting scripts as long as you'll tolerate it. That is his job, as defined by the unscrupulous manufacturer that thinks this should qualify as warranty service. Obviously they are hoping that you'll grow tired of this game and give up before they are forced to make an actual service call. It is hard not to get angry and frustrated at the phone-support people, but don't blame the employees for the stupid policies of their corporation.

We have clients that were induced to spend dozens of hours on phone support, in a seemingly endless loop. Granted, if those customers were a bit more assertive, they probably could have forced an on-site visit more quickly. But the phone-support technicians have many 'tests' and 'quick fixes' that they ask you to perform, such as installing diagnostic software, 'reseating' memory, and updating the BIOS. Each step, while seemingly a plausible part of a troubleshooting process, is time-consuming and sometimes intimidating for the uninitiated. In most of these extreme cases, we were able to intervene and force the manufacturer to honor the warranty. But the cost of our support labor was a significant fraction of the replacement value of the item, which is unfortunate.

This is shabby treatment, especially when the customer paid additional money for the privilege of a worse-than-useless warranty. We won't name the companies that engage in this bad business (since we wouldn't want to leave anyone out). But we can say, without qualifications, that you should interrogate your manufacturer as to the specific details, before you spend good money on a warranty or service package.

How do you win the warranty game?

There are several strategies that you can adopt to get good value out of your warranty. One way to go is simply not to play: you may actually save money if you just accept that things sometimes break and simply need to be replaced (treat the network equipment as disposable appliances, and then concentrate on safeguarding the data/methods).

Alternately, you can try the well-worn tactic of paying more, and expecting more: the quintessential high-end vendor for network equipment is IBM. Their workstations, laptops, and servers come at a premium, but they are very unlikely to break or fail. If they do fail within the warranty period, IBM is aggressive about protecting their reputation, and they do what is necessary to make you a happy customer. There is nothing wrong with this business philosophy, and it can actually save money in the long run (less downtime, and fewer support labor costs). That is why IBM is always talking about TCO, the Total Cost of Ownership. We respect this approach, but we acknowledge that cash-flow is often a more immediate concern than TCO for most small businesses and organizations. If your company is a 501(c)(3) non-profit, you should consider the many philanthropic outlets that offer IBM products well-below cost. IBM has also earned our respect with this communal generosity.

What if you can't afford IBM, but you still think you should get a warranty to protect a large purchase? While we cannot provide a blanket answer, we can offer the following suggestions:

  • Consider buying the device from a local vendor. That way, if there is any dispute, you can physically take the device to them and resolve the issue in person. Also, local companies are as interested in maintaining their reputation in their community market, as IBM is in the global market; it is their bread and butter.
  • Read the warranty fine print, and insist on discussing scenarios with the salesperson. Insist that they put any claims in writing. Make it clear that they should not assume you will pay extra for a warranty unless they can demonstrate its value. And if they are including the warranty "for no cost", make it clear that your decision to buy their brand or another will depend in part on your perception of their warranty service. Hold the vendor accountable.
  • Consider taking out an insurance policy to cover the failure of expensive, vital assets. You should also consider covering the cost of support and recovery labor, as well as part replacement. Allora has experience in working under the guidelines of insurance claims, and we know how to defend your interests in restoring your business network.
  • And finally, if you are stuck with an unscrupulous vendor's telephone-based warranty service, insist on escalating the trouble ticket, and attempt to make yourself more costly to them than they are to you. Make sure they are aware that you know about their game. Push your case. In these situations, it is the squeaky wheel that gets the grease.
Praise for Intrex

We wish to call special attention to a local vendor, whose work we respect, and whose warranty policy is quite sensible. Intrex makes workstations, servers, laptops, and specialty computers; they also sell networking gear, computer parts, software, and Internet Service. There are 10 Intrex locations throughout Central Carolina, so you probably live and/or work close to one of their storefronts; you should stop by someday and check out their demonstration machines. Intrex has impressive technology on display, in a low pressure environment.

The Intrex warranty is quite simple: one paragraph of no-nonsense explanation and a list of vendors who you must go to directly for support after the Intrex warranty expires (usually 30 days, but 1-3 years on computers). At first glance, it seems they are simply passing the buck (which would be acceptable, considering their prices are quite low). But a 30-day exchange or replacement policy is useful and reasonable for parts and pieces; and the warranty on Intrex computers covers hardware repair/replacement labor, as well as the parts, for a full year (with affordable extensions if you like).

They will fix or replace your gear, but they won't troubleshoot software bugs or configuration, as part of the warranty. They are not offering to spend 20 hours over the phone asking you to rearrange jumper settings; they expect that you have verified that the problem is with the device hardware itself, and not just a virus. You may need to rely on a consultant or serviceperson to make that determination, but Intrex is candidly stating that they are not assuming that burden for you, nor charging you for doing so. It is refreshingly honest, and it is also why the price is nice. Way to go, Intrex.

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