Getting Short-Term Maintenance For Your Power i Machine
February 20, 2013 Hey, Joe:
I purchased a three-year maintenance contract when I bought my Power7 machine in 2010. The contract runs out in May but I need extended maintenance through July when I’m installing a new machine and returning the old machine to the leasing company. How do I extend my hardware/software maintenance for only two months without having to buy a one-year maintenance contract?
This is a fairly common situation and one that IBM provides an out for in their maintenance contracts. Here’s how you can sign a one- or multi-year maintenance contract for your existing machine and then cancel the contract after you replace the machine in two months.
1. Talk to your IBM business partner or IBM and ask them to provide a maintenance quote for your old machine. You’ll probably want to price out both a one-year contract and a multi-year contract, so you can see which contract gives you a less expensive quarterly price. You want to pay this contract on a quarterly basis, because you’ll only be using it for a few months. Negotiate your best price.
2. The maintenance contract will reference and include an “IBM Master Services Attachment for ServiceElite” or a similar document that lays out the terms of service for your hardware and software maintenance. This may be a Master Services attachment that you signed in the past (maybe when you bought your machine) or one that you will sign with your new maintenance contract. The important thing is to get the Master Services attachment that will cover extended hardware and software maintenance for your machine.
3. Under the “Renewal and Termination” section of the Master Services attachment, look for a clause that has wording similar to the following text:
“You may terminate services for an Eligible Product on notice to IBM, if you permanently remove it from productive use within your Enterprise.”
The key phrase here is “if you permanently remove it from production use.” IBM allows you to cancel a maintenance contract if you dispose of or stop using a covered machine (removed from production use). So since you’re just keeping the machine until you can replace it and sending the covered machine back to the leasing company, you can take advantage of this clause and purchase maintenance from May through July before canceling the contract. Note that you could also take advantage of the production use clause if you had bought a machine and you were selling the old machine. The production use clause should cover both situations.
Double-check with your business partner or IBM to make sure this is their understanding on canceling maintenance. However, I have used the production use clause before to cancel maintenance contracts on machines I’ve taken out of service, so my guess is that IBM won’t have any objections to you using it now. But it’s always nice to ask for verification.
4. Once you get your best quarterly price and sign the extended maintenance contract along with the Services attachment, use the machine and pay the quarterly bills for as long as the machine is in service. Make sure that you set up the contract so that you pay the maintenance bills on a quarterly basis, rather than on a yearly basis. Quarterly bills become important when it’s time to cancel the contract.
5. Once the machine has been replaced, contact IBM’s maintenance organization to inform them you have taken the machine out of production use and to cancel maintenance for the items that have been returned. Include the model numbers and serial numbers of the items to remove from maintenance. In the notice, ask IBM to confirm that they have received the cancellation notice and to confirm that the items will be cancelled. This notice can be sent by email.
6. Since you paid your maintenance quarterly and you may only be using maintenance for two months, IBM will probably give you a refund for unused maintenance after contract cancellation. I purposely said that you should pay your bill on a quarterly basis to avoid any issues or delays in getting your refund if you had paid for one or more years of maintenance in advance. By paying quarterly, you won’t have as much money tied up with IBM while you’re waiting for a refund.
By paying your maintenance quarterly and by taking advantage of the production use clause, you can: 1) get the lowest price possible for your maintenance; and 2) only pay for the maintenance you use, regardless of how long you signed a maintenance contract for. I’ve used the production use clause twice in the last three years, and it’s helped me through the exact same situation you’re facing right now.