Cistor named as supplier on Crown Commercial Service’s TePas 2

Hardware leasing v Hardware as a Service: What’s the difference and how can they be more sustainable?

With the introduction of our new Sustainable Hardware as a Service offering, we thought we’d breakdown the different types of IT ownership models that are available. Our quick overview should give you a basic understanding of each of the models, but for more information, please get in touch with a member of the team.

Outright Ownership

The one that most IT teams are familiar with. You buy your kit directly from a vendor such as Cisco or through a partner and take ownership for the maintenance, upgrades and decommissioning yourself.

From a finance perspective, owning the asset means that it is classed as a capital expenditure. Overtime the value of hardware will depreciate and will become more expensive to maintain.

This model is great for businesses that want complete control of their hardware and have teams in place to run updates and maintenance. However, the upfront costs associated with purchasing hardware, as well as those associated with ongoing maintenance can lead to businesses looking at alternative models of ownership.

Hardware Leasing

In this instance there is a financial agreement in place with another company to supply you with the hardware. Think of it as renting your routers and switches, as opposed to owning them outright. At the end of the agreement, the equipment typically goes back to the leasing company, although some lenders will offer you the option of purchasing the equipment via a balloon payment.

Leasing often comes with options to wrap support and maintenance into the contract, if this isn’t the case then you will need the resource in place to do this yourself.

This model allows businesses to access hardware without the need for a large upfront cost as payments are spread. However, as a there is a financial transaction taking place on a physical asset, this can still have capital expenditure implications.

Hardware as a Service

The Hardware as a Service (HaaS) model differs from leasing in that you are consuming the hardware as part of a service. In a similar model to how businesses consume software (SaaS) or cloud (IaaS), you are paying for access to the hardware, meaning the ownership of the product remains with the business you are taking it from.

Like leasing, obtaining the networking hardware you need for your business becomes easier as there are no upfront costs. At the end of the services, the hardware then goes back to the supplier.

As this is a service, the supplier is responsible for the upgrading, maintenance and support of the hardware. If something breaks, they will be on the hook to replace it for you. Because they are taking hardware back out of other businesses, this could mean that the kit you receive isn’t always brand new and has been through a remanufacturing process instead.

From a finance perspective, this is now an operational cost as you don’t own the hardware and no financial transaction takes place for the asset directly. This makes this model of ownership great for customers who offer consumable services to their customers and are looking to mirror this operational model themselves, or who are looking to reduce the number of fixed assets that they own.

Sustainable Hardware as a Service

Building on the HaaS model, we developed our Sustainable Hardware as a Service. We own the asset and provide fully managed shipping and “white glove” product recovery services. This is backed with Cisco’s full manufacturer warranty and Smartnet support, covered throughout the period of the service. However, we’ve designed the solution in a way that embeds both sustainability and customer value at its core.

We take a customer’s Cisco requirements and analyse the solution to identify opportunities to blend in Cisco Refresh, Cisco’s fully certified remanufactured equipment. This approach gives you access to the latest and great new equipment with the traditional value achieved from remanufacturing. This means you are reducing your Carbon impact via a cost-efficient solution that doesn’t come with any technical trade off.

We then provide a financial wrapper using Cisco Capital’s Green Pay solution. Cisco Green Pay is an award winning financial solution that ensures Cisco products are sent back to Cisco as part of the service lifecycle and supporting Cisco’s world leading sustainability objectives for 100% product takeback.

Finally, through our detailed product research, you gain access to comprehensive ESG and carbon impact metrics throughout the product lifecycle. From day one you have visibility on the role that remanufactured IT is having in helping your business achieve it’s ESG commitments.

Platinum standard achieved for ecovadis rating

As organisations look to align their procurement practices with their sustainability targets, many use external certification bodies to review how their suppliers perform against set criteria.

One of our longest standing clients, Colt Technology Services asked that we complete an EcoVadis assessment as a way for them to review their supplier’s sustainability performance.

It’s been a really useful exercise as we received feedback that outlines our strengths and shows areas for improvement. The tool also provides the ability for us to benchmark our sustainability performance amongst our industry peers.

We were delighted to have scored 78/100 which ranked us in the top 1% of all companies globally.

1%

Cistor are within the top 1% of all companies globally who participate in these assessments.

Getting Started with Remanufactured IT

Research from Gartner predicts that 80% of hardware vendors product portfolios will come from circular initiatives by 2030, up from 20% in 2023. This means you’ll be getting more of the latest and greatest tech and networking hardware without needing to buy new every time.

Which is where remanufacturing comes in.

80%

of hardware vendors product portfolios will come from circular initiatives by 2030

What is Remanufactured IT?

Put simply, remanufactured IT is preowned equipment that has been restored to like-new condition, often with the same warranties and guarantees. It's a great way to save money, reduce your environmental impact, and get the same performance as new equipment.

Cisco’s Refresh programme is a great example of this. They take preowned technology, such as switches that have been returned by customers and test them for functionality and possible defects.

Any worn components are replaced and any data stored is safely deleted, so you get hardware that matches the stringent manufactured standards of like new. Just like when you buy a car from an approved dealership, the hardware is then supplied good-as-new with the manufacturers full warranty and associated software licenses.

OK, got it. Why would I use it in my Network infrastructure over new though?

There are many reasons why your company should use remanufactured IT. Here are a few of the most important:

Cost

Let’s not beat around the bush, buying remanufactured IT is cheaper. We typically find our customers save between 20-30% by buying Cisco authorised Refresh through us. At a time when businesses are under pressure to reduce costs, this makes it the ideal way for IT departments to do so, without having to compromise on performance or piece of mind.

Supply Chain

IT hardware goes through a long and winding journey from raw materials to your network. This makes it vulnerable to supply chain disruptions, which can cause delays and headaches. Remanufactured IT skips some of these steps, so it's less likely to be affected by supply chain issues.

The Cisco Catalyst 9000 range is a perfect example of how remanufactured IT can solve supply chain issues. When Cisco struggled to source components during Chipogeden, lead times for new products extended daily. But thanks to our Intelligent Supply Chain offering, we were able to help our customers get as good-as-new CAT9K hardware in just a few weeks.

It’s twice as nice for the environment

Utilising remanufactured IT is great for the environment for two reasons. Firstly, hardware such as switches is often so well produced that it is difficult to recycle, by utilising hardware that has already gone into circulation, you’re extending it’s life span and reducing the amount of e-waste you are creating.

Secondly, by choosing remanufactured hardware you are avoiding the production of a new bit of kit, meaning there’s less of an impact on your Scope Three emissions and the environment as a whole!

In fact in a study carried out with our customers, Colt, we found that by using remanufactured IT in a five year period they avoided:

22.6 tonnes of ewaste avoided

1,012 tCO2e saved

That’s the equivalent of three Boeing 747 jets!

Interested? We thought you might be

Introducing remanufactured hardware into your IT network can seem daunting. We offer network discovery sessions for anyone considering it. We’ll look at your current infrastructure and work with you to identify the best places to start, sharing supply chain insight along the way.

A review of Data Centre Networking in 2022

At Cistor we are still seeing a number of key use cases for data centre networks, particularly in hybrid and managed cloud environments. Managed cloud is typically deployed by MSPs for customers who want a cloud experience on dedicated infrastructure, as they plan a longer-term strategy for migration to the cloud. Hybrid cloud is another common use case for organisations with difficult corner cases and the need to maintain on premise deployments. With this in mind, we believe that enterprise data centre networking is still very much alive in 2022 and will continue to be for some time to come. In this blog post, we explore three of the most common solutions today and list some considerations for anyone investing in this space.

Solutions Recently Dominated by Acquisition

For almost 10 years there has been two leading solutions in the data centre SDN market, Cisco ACI and VMware NSX-T. Cisco ACI is a full stack data centre SDN solution and VMware with an overlay solution that sits on top of a network fabric from any vendors such as Arista, Juniper, HPE or even Cisco ACI itself. Both products were acquired, which speaks to the innovation of our large vendors, but that is a separate discussion. ACI came to Cisco through the acquisition of Insieme Networks and the famous MPLS (Mario, Prem, Luca and Soni) gang responsible for so much of the Cisco portfolio. NSX is based on Nicira and the team at Stanford (Casado and McKeown) who burst networking open with SDN around 2011. More recently a third new architectural option has presented itself with the emergence of the Smart NIC market, with one of the leading contenders being Pensando (now part of AMD), which is the latest movie from the aforementioned MPLS gang. We will focus on these three solutions, as we believe they are the three main options for enterprise scale data centre networking in 2022.

The Three Main Options for Enterprise Scale Data Centre Networking

Cisco ACI is a data centre network architecture, consisting of switches, controllers, and software. The switches are organized in a Spine and Leaf Clos topology, with the Spine responsible for high-speed connectivity between leafs and inter-Pod or inter-Site connectivity to other ACI Pods and Sites. The leafs are used to terminate workload and endpoint connections, including everything from bare metal, storage, compute, hypervisor, and cloud. The controllers deal with all configuration and analytics, are based on an object model for programmability and sit outside of the traffic flow. The result is an architecture which provides Layer 2 and Layer 3 overlays, micro-segmentation, and a common policy plane across private, public and hybrid cloud environments.

Almost seven years after initial launch, ACI is a mature and stable platform with deployments across many large enterprises and continues to be a market leading solution. We regularly recommend Cisco ACI as a solution due to its universal reach, support for bare metal workloads and the increasing need for zero-trust, which can be achieved through ACI’s native micro-segmentation capabilities. However, ACI is not suitable for all environments and when we don’t recommend ACI is it usually because the environment is too small to justify the cost or customers are aiming to avoid lock-in to a single vendor.

The Main Differences Between NSX and ACI

A key difference between NSX and ACI is that NSX is hardware agnostic. The underlying network fabric can be built using hardware from a variety of vendors, such as Arista, Juniper, Dell, HPE or whitebox combinations such as Cumulus Linux (now an Nvida company) on Mellanox. However, an IP routed fabric is recommended for performance and resilience. NSX-T then sits within the hypervisor and creates an SDN overlay with switching, routing, security, micro-segmentation, and load balancing (derived from the AVI Networks acquisition) functions.

Similar to ACI, NSX is an very mature and stable technology with a wide enterprise customer base. In the last couple of years, anecdotally we have seen customers becoming more focused on NSX-T, sometimes even over the top of ACI. This is partly due to the prevalence of VMware as a hypervisor, but it is also a means of obtaining vendor independence and allows customers to take advantage of network policy implementation at the hypervisor level, rather than at the physical switch. However, the architecture doesn’t natively deal with bare metal workloads and requires an agent, which still gives ACI an edge in dealing with legacy and storage workloads.

Uncertainty Abounds with the VMWare Acquisition

But currently, the biggest concern is the uncertainty surrounding the upcoming acquisition of VMware by Broadcom. The Broadcom acquisition runbook involves taking a mature product, increasing margins through a combination of reduced cost (layoff and reduction in R&D budgets) and increased pricing, and then wringing the market for everything it’s got. Optimists and outward communication will say that the acquisition is about enabling Broadcom’s software capability, they will be about 50/50 on hardware and software once the acquisition completes. This may be the case but at the very least, there is no getting away from the fact that the acquisition brings uncertainty.

Pensando- A Smart NIC SDN Solution

Finally, there is an exciting new option for consideration in Pensando, a Smart NIC SDN solution. It provides a chip on the Smart NIC that can deliver switching, routing, and network policy, with a cluster of NICs communicating back to a central controller. This approach has two significant advantages, the first being cost as network equipment is essentially reduced to packet forwarding, similar to NSX, as cost instead goes into the NIC. The second is that all network policy is implemented at line rate within host itself and very close to the workload. The primary concern here is not the solution itself but our own lack of knowledge on Pensando, we need to understand the technology better before we consider proposing it to customers. Although this is an internal problem, we suspect that a lot of organizations will be in a similar situation.

Current Recommendations

We always endeavor to make bespoke recommendations with a Network Discovery, based on the customers unique requirements and circumstances. However, while the Broadcom acquisition of VMware plays out and Pensando emerges, our internal skills investment will continue to focus on Cisco ACI.

Cistor achieve Cisco’s new Environmental Sustainability Specialisation

As one of the largest Circular Economy Partners to Cisco in Europe, we’re delighted to have been awarded the recently launched Cisco Environmental Sustainability Specialisation.

Members of our team completed training set by Cisco and successfully passed an exam designed to strengthen our role in actively supporting Cisco’s sustainability pledge for product returns.

This certification confirms that:

We’re helping customers achieve their sustainability goals by using authorised remanufactured IT through Cisco’s takeback and reuse programme
We’re partnering with Cisco and our customers to keep technology in use for longer through returning, reusing and redeploying technology aligned to circular economy principles.
We’re actively supporting Cisco’s sustainability pledge.
The Take Back Initiative ensures that technology is used for its full life

It’s also further recognition of the significant role we play in Cisco’s global initiative to responsibly repurpose or recycle end of use equipment to ensure that the technology that already exists, is used for longer.

Over the last fourteen years, Cistor has partnered with Cisco to keep technology in use for longer. As a key strategic circular economy partner in Cisco’s Refresh programme, we have utilised Cisco Refresh Technology in IT contracts around the world - including in Banks, the London Stock Exchange, International Service Providers, Government Departments, Universities, Businesses and Mobile Technology Companies.

Increasingly, we see organisations deep-dive into their environmental and social impact. The conversations we have with our clients is changing. Of course, organisations need technology to deliver continuity, to be secure, to be cost effective and to be resistant to supply chain challenges. However, the biggest change we are seeing is that organisations are now questioning how IT can align with their wider business sustainability goals such as eWaste, the circular economy and finite resource protection. Our Sustainability IT Consultancy offers support for organisations that crave this alignment.

Cisco Refresh provides our customers with the reassurance that the technology they are using is supplied with the same warranties and licences as new, and with the same SmartNet support. The bonus is that by utilising technology that already exists, our clients reduce eWaste and climate impact by not having to purchase brand new technology.