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Decisions, Decisions

Because of its decision to go with new equipment, Michaels saved a great deal of money and is now poised to further take advantage of its new technology.


Photography by Sean McGinty

 

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CUSTOMER: Michaels Stores Inc.
HEADQUARTERS: Irving, Texas
BUSINESS: Retailer of arts-and-crafts products
HARDWARE: More than 100 IBM System p servers, including 10 System p 570s, more than 20 System p 520s and six System p 550s
CHALLENGE: Deciding whether to purchase new or used System p servers when faced with an inevitable upgrade
SOLUTION: Comparing the overall costs of new equipment versus used equipment by factoring in such issues as warranties and ongoing maintenance

A few years ago I purchased a laptop. It wasn't a monumental moment to be sure, but a necessary one nonetheless. As I was shopping around, one of the decisions I had to make was whether to go with a new or refurbished unit. Because of cost considerations, I went with the latter, saving myself a couple hundred bucks in the process.

Of course, I was taking a chance by making this decision. Even though the computer was covered by the manufacturer's 90-day warranty, anything that may have gone wrong with the system after that would have to be paid for out of my own pocket. Fortunately (knocking on wood as I write this), I've had no issues with that system.

Even though I was looking to buy only one computer, my choices aren't all that different than those of larger organizations. They too are concerned with costs. In some cases, it might make sense for them to go with a certified used system, with the price being less than that of new hardware. However, the costs of purchasing additional maintenance contracts might push the overall price above that of new hardware.

The new/used choice can quickly become a conundrum. But if an organization does enough research - looking at both upfront and long-term costs of their IT asset purchases - that puzzle might easily be solved. For example, Michaels Stores Inc., with the assistance of Sirius Computer Solutions and IBM, conducted an analysis of its future IBM* System p* requirements and then compared the costs of new versus certified used servers. Based on that analysis, it decided to go with new systems - and in the process, it saved around 20 percent compared to the purchase of used equipment, according to Larry Pritchett, technical services manager with Michaels.

This may seem counterintuitive, but it actually turned out to be a crafty move for this large arts and crafts chain of stores.

 

Jim Utsler, IBM Systems Magazine senior writer, has been covering the technology field for more than a decade. Jim can be reached at jjutsler@provide.net.


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