Never Let the Vendor Set Up a Server
-
@Breffni-Potter said:
@Carnival-Boy said:
Really? I'm surprised. I didn't think there was much margin at all on hardware these days.
Having said that, I once got a quote for HP workstations from my Autodesk guy and the prices were obscene, so I guess he may have customers out there who are happy to buy at his enormous mark-up.You've just answered your own question
- For a brand new office with 20x desktops and a server, you could easily make £1000 just on reseller margins alone.If you don't understand what the price of something should be, you would normally trust your reseller to look after you. I've just had a stack of quotes from different suppliers for something and for a generic Cisco box, they added £100 to the sale price, when Misco and all the others are £100 cheaper.
I've seen quotes that are £400-800 higher compared with the price listed on their website for the exact same product and spec. Because they can get away with it.
And sometimes it is worth it. We don't look for the lowest price, we look for the best TCO. We work with VARs that really do add value. xByte and SoftMart are good examples where we get tons and tons of the "value add" and we would never expect to pay the lowest possible price because we get lots from the relationship. We also know that they tell us when they can't get a good price. SoftMart has told us to just buy parts from Amazon before - because they know that that's where the good prices are. In turn, they know that we aren't going to shop around and aren't going to try to nickle and dime them. They provide a ton of support for us, paying a few points premium to get that is well worth it. Haggling makes everything more expensive too - it wastes time and both sides have to pay for that effort.
I don't expect VARs to be rock bottom prices. The VAR bit has value. Pure resellers like Amazon or NewEgg can have lower prices but they can't get you two hour delivery, get the vendor on the phone, look up compatibility, etc.
-
$20 a box? It's closer to £30 a box from what I have seen in this market.
@scottalanmiller said:
I don't expect VARs to be rock bottom prices. The VAR bit has value. Pure resellers like Amazon or NewEgg can have lower prices but they can't get you two hour delivery, get the vendor on the phone, look up compatibility, etc.
You'll love this. Unmanaged Cisco switch and they doubled the resell price.
I was not a happy bunny.I agree with the the right reseller does add value.
-
@Breffni-Potter said:
$20 a box? It's closer to £30 a box from what I have seen in this market.
I'm sure that that varies massively based on what it is. If you are talking about $400 entry level semi-commerical desktops the margins are tiny. If you are talking HP Z workstations, they are big.
Printers are zero. But ink is huge.
-
@Breffni-Potter said:
You'll love this. Unmanaged Cisco switch and they doubled the resell price.
I was not a happy bunny.Ummm...... yeah. LOL That's not going to fly. Unmanaged, should be like 5% tops.
-
@scottalanmiller said:
Ummm...... yeah. LOL That's not going to fly. Unmanaged, should be like 5% tops.
It's a shame because they had the most beautiful proposal of the lot of them....
-
@Breffni-Potter said:
@scottalanmiller said:
Ummm...... yeah. LOL That's not going to fly. Unmanaged, should be like 5% tops.
It's a shame because they had the most beautiful proposal of the lot of them....
That's where all of the money goes
-
@scottalanmiller said:
@Carnival-Boy said:
I generally prefer to get the services and the hardware from the same place because otherwise if you get the service company on-site and it transpires that the hardware is faulty you could end-up paying twice to get the service company back in after replacement hardware has arrived.
How does this happen? I mean that as a legitimate question as I'm not seeing where you could normally be charged twice.
If you have a warranty, why would you have to pay to get the equipment fixed?
If you don't have a warranty, why would the reseller be brought in to do the repair instead of having the services company do it?
In either situation, with or without warranty, I don't see how you would be charged twice.
I buy the server from Company A but the installation service from Company B. Company B estimate 4 hours work so quote $400. The server arrives and Company B start the project. They find that the server is either broken or is missing crucial parts. HP agree to send new parts but it will take 24 hours. Company B has to abandon the project and return the following day (if they're available!). So a 4 hour job now takes 8 hours with travel etc etc. How much do Company B now charge?
-
@Carnival-Boy said:
@scottalanmiller said:
@Carnival-Boy said:
I generally prefer to get the services and the hardware from the same place because otherwise if you get the service company on-site and it transpires that the hardware is faulty you could end-up paying twice to get the service company back in after replacement hardware has arrived.
How does this happen? I mean that as a legitimate question as I'm not seeing where you could normally be charged twice.
If you have a warranty, why would you have to pay to get the equipment fixed?
If you don't have a warranty, why would the reseller be brought in to do the repair instead of having the services company do it?
In either situation, with or without warranty, I don't see how you would be charged twice.
I buy the server from Company A but the installation service from Company B. Company B estimate 4 hours work so quote $400. The server arrives and Company B start the project. They find that the server is either broken or is missing crucial parts. HP agree to send new parts but it will take 24 hours. Company B has to abandon the project and return the following day (if they're available!). So a 4 hour job now takes 8 hours with travel etc etc. How much do Company B now charge?
Depends, did you have a project or a time and material bid?
-
Do you think that makes a difference?
-
Surely instead:
Company A ships the server to Company B.
Company B does a health check and confirms it is good.
No one in their right mind commits to installing an untested brand new server on a project. Even if company A do everything, if you schedule a week-end of downtime, they turn up with the never turned on HP server, and it still takes 24 hours to get replacements from HP, then the project is at risk. Especially with a time sensitive migration, with no downtime projects it's less of an issue but even so.
-
@Carnival-Boy said:
@scottalanmiller said:
@Carnival-Boy said:
I generally prefer to get the services and the hardware from the same place because otherwise if you get the service company on-site and it transpires that the hardware is faulty you could end-up paying twice to get the service company back in after replacement hardware has arrived.
How does this happen? I mean that as a legitimate question as I'm not seeing where you could normally be charged twice.
If you have a warranty, why would you have to pay to get the equipment fixed?
If you don't have a warranty, why would the reseller be brought in to do the repair instead of having the services company do it?
In either situation, with or without warranty, I don't see how you would be charged twice.
I buy the server from Company A but the installation service from Company B. Company B estimate 4 hours work so quote $400. The server arrives and Company B start the project. They find that the server is either broken or is missing crucial parts. HP agree to send new parts but it will take 24 hours. Company B has to abandon the project and return the following day (if they're available!). So a 4 hour job now takes 8 hours with travel etc etc. How much do Company B now charge?
I'm confused. The thing that I don't understand is why you have a Company B doing "IT engineering" work as part of "installation services." I don't understand how the issue arises here. Again, I think this is a difference in terms. I think you are using "installation" to mean both the racking and stacking non-technical bench work AND the subsequent IT engineering work. What I'm questioning is why you have those two functions lumped together. That Company A does the "installation" of physically installing the box into the rack and plugging it in makes perfect sense and should be super cheap as they don't even need someone who knows what a computer is to do that work. Hopefully they know how to plug in the ILO or DRAC and put in your address for it. But that's it. Done. The bench work is complete.
Then that company tells you (or Company B) that the racking is done and the machines are accessible. Now the IT people at company B, the skilled people who are party of your IT planning and oversight, setup the server.
If done this way, you get the separation of duties to save money and get focused skills, you get the HP reseller handling any HP issues, you get your IT support without a break in the chain, etc.
I'm not sure what's happening that you are feeling stuck having the OS installation done at the moment of physical server delivery.
-
@Breffni-Potter said:
Surely instead:
Company A ships the server to Company B.
Company B does a health check and confirms it is good.
No one in their right mind commits to installing an untested brand new server on a project. Even if company A do everything, if you schedule a week-end of downtime, they turn up with the never turned on HP server, and it still takes 24 hours to get replacements from HP, then the project is at risk. Especially with a time sensitive migration, with no downtime projects it's less of an issue but even so.
Exactly. And this is how it works in enterprise IT departments too. Yes, each of these roles is internal instead of external, but the processes remain the same.
-
@Carnival-Boy said:
I buy the server from Company A but the installation service from Company B. Company B estimate 4 hours work so quote $400. The server arrives and Company B start the project.
So if you use all company A, how does this change? If you buy a server through Company A and you order four hours of IT work from them and the server that you get is not ready when you have scheduled them to come out and work sure, they might decide to give you a break because they are handling all of the parts, but in reality there is not really any difference here, for the most part, between them needing to be paid and Company B needing to be paid. Even if you are getting the work totally from Company A they still have to schedule the people and pay them even if the parts are bad. That's why, whether you use all company A, a mix of company A & B or all internal departments we don't schedule next steps until previous steps are done. There is lots of risk and wasted money from big, or even little, unknowns and surprises.
Now when you buy everything from one vendor, you can put more pressure on them, but you are just lowering the margins and making them less likely to want to work with you or you will encourage them to pad more if you aggressively schedule them to do IT work for which the equipment has not been tested yet. Hopefully they would warn you not to have the resources from the IT side all lined up and billing by the hour before the bench work was validated.
-
@Breffni-Potter said:
Surely instead:
Company A ships the server to Company B.
Company B does a health check and confirms it is good.
No one in their right mind commits to installing an untested brand new server on a project. Even if company A do everything, if you schedule a week-end of downtime, they turn up with the never turned on HP server, and it still takes 24 hours to get replacements from HP, then the project is at risk. Especially with a time sensitive migration, with no downtime projects it's less of an issue but even so.
There is no week-end downtime whilst this is going on. The server arrives, it is put together and racked up and then the RAID is configured and the hypervisor is installed. It will then sit there for some time before I eventually start installing or migrating VMs on to prior to it going in to production.
-
@scottalanmiller said:
Again, I think this is a difference in terms. I think you are using "installation" to mean both the racking and stacking non-technical bench work AND the subsequent IT engineering work. What I'm questioning is why you have those two functions lumped together.
Yes, I am lumping them together. It's all labour costs to me and I don't distinguish between the two.
-
@Breffni-Potter As an example of what @scottalanmiller is recommending, I'd be interested to know what you would charge and if it would save me money. So I'll give you the basics of my last Proliant order.
I paid £750 for the setup of the server, RAID10 and ESXi install. That is their day rate. It took them quite a bit less than that in the end, but it was fixed price job and I'm more or less happy with what I paid.
The alternative would be to buy the Proliant from Misco and get Misco to do the installation and racking and then get you in later to do the RAID and the ESXi. I don't know how long that would take you, an hour maybe? If you're in London, that's around a 140 mile trip to my place on top. I don't know how much Misco charge for benchwork. Do you? What is the norm for benchwork in the UK?
I'd be interested in any ballpark figures you might like to share
-
@Carnival-Boy said:
Do you think that makes a difference?
Yes I think project based vs Time and Material makes a huge difference.
Just ask Hubtech. He bid a job as a project - expected that project to take 150 hours, he's north of 200 hours now, but isn't making any more money because it was a project bid.
So if you got a project bid that locked in a specific price for a specific outcome, then your price shouldn't change regardless of how long it takes them to accomplish it.
-
@scottalanmiller said:
@Carnival-Boy said:
I buy the server from Company A but the installation service from Company B. Company B estimate 4 hours work so quote $400. The server arrives and Company B start the project.
So if you use all company A, how does this change? If you buy a server through Company A and you order four hours of IT work from them and the server that you get is not ready when you have scheduled them to come out and work sure, they might decide to give you a break because they are handling all of the parts, but in reality there is not really any difference here, for the most part, between them needing to be paid and Company B needing to be paid. Even if you are getting the work totally from Company A they still have to schedule the people and pay them even if the parts are bad. That's why, whether you use all company A, a mix of company A & B or all internal departments we don't schedule next steps until previous steps are done. There is lots of risk and wasted money from big, or even little, unknowns and surprises.
Now when you buy everything from one vendor, you can put more pressure on them, but you are just lowering the margins and making them less likely to want to work with you or you will encourage them to pad more if you aggressively schedule them to do IT work for which the equipment has not been tested yet. Hopefully they would warn you not to have the resources from the IT side all lined up and billing by the hour before the bench work was validated.
Interesting - I've personally never seen this approach before - it does make sense, I've just never seen it.
As an SMB consultant I did it all - the so called bench work (installing the components into the chassis and racking it), and the RAID/OS/etc IT work.
-
@Carnival-Boy said:
I paid £750 for the setup of the server, RAID10 and ESXi install. That is their day rate. It took them quite a bit less than that in the end, but it was fixed price job and I'm more or less happy with what I paid.
I'm curious, if he ran into problems that made this take a full day and one hour on the second day, would you be charged for two full days? Or only for one day? Again I'd say it depends on if you are being charged time and materials vs project.
From here it appears that you're being changed time and materials with a minimum charge of one day for a service like this - which you indicated took significantly less than one business day to complete (because there were no issues).
-
@Carnival-Boy - First I must unleash the legal disclaimer.
"The following statement does not constitute a quotation or guarantee or offer of goods and services"
Why won't the server come from Misco to my office? Then I build the raid? Do the config? setup remote access tools, then stick it on a courier to you.
Alternatively, I stick it on a courier, then get an engineer who just does bench work over to you, he un-boxes the server, sticks it in the rack, makes it look good, then he walks off.
I then remote in and fix any tweaks or snags.
I am much more expensive than a bog standard racking engineer, so why would you pay my rate to take something out of a box? More importantly why are the supplier doing the config work on site for you? They should do it at their bench.
