When is “Long Life” Long Enough? Part II

In my first post of this series, I wrote about the term, “Long Life,” and how it is sometimes used by people I meet in the OEM community. In most cases “long-life” is used to describe a product available for a few years and operate in the field for at least 3 years after purchase.

I find that use of the term intriguing, as I had always assumed “long-life” referred to a product available to purchase for many years, sometimes for twice the time period of your typical product offered to the general market.

For example, if a PC Server is offered to the IT community for three years — meaning you can purchase it in a certain configuration over that period — then is discontinued and replaced by a new model with new features and capabilities. It would seem a long-life PC Server should be available to purchase for four to five years.

Purchasing a long-life server gives the OEM customer a level of consistency on a platform design many need to manage through long-development periods and when new features are not required for a long period. Some Dell OEM customers can take up to nine months to develop and qualify their application solution on a given server, they need to get demo units in front of their customers who may take six months to a year to qualify the solution in their infrastructure.

Given that scenario, a server could be available for purchase from the OEM supplier for almost two years before any appreciable sales volumes are achieved. Then, once the unit starts selling at a decent run-rate, the OEM customer may need a year or more of sales to the end user before they recoup their investment in bringing the solution to market. In total it could take three years of availability before an OEM customer can see an appreciable profit on a product release.

This reality can be a daunting proposal for an OEM supplier, especially one leveraging COTS (Commercial Off the Shelf) products to drive efficiency and leverage the efficiencies of scale. If a core component, such as a motherboard chipset or hard drive technology, experiences advancements on an 18-month cycle, it can be difficult to justify providing a technology for many years past its mainstream technological effectiveness in a highly-competitive market. Aside from an OEM requiring a long-life platform, who would purchase a server based on technology which was made obsolete by new platforms two years prior?

It isn’t just about getting more performance, either. Technology advances occur in many different ways. They can get faster with each new cutting-edge release while becoming more affordable. Power consumption per performance level also decreased dramatically in recent years, greatly increasing cost effectiveness and efficiency.

Compatibility, ease of use, improved management, and advanced-lifecycle control have all seen growth with new server platforms. As such, the argument for moving forward is more than just raw performance. 

So, what kind of lifespan does your application require to be profitable for your business? I’d love to hear your thoughts on the need (or lack-thereof), for long-life servers in the OEM market.

For more information on our OEM Solutions visit www.dell.com/oem and or you can follow me on Twitter at http://www.twitter.com/franklinatdell.

About the Author: Franklin Flint