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PBX Maintenance Contracts: What they don’t want you to know

Most organizations larger than a home office have some type of business phone system. A phone system is also referred to as a PBX. Because they can be costly items ranging from $2,000-$200,000, they are often sold with Maintenance Contracts. These are similar to “extended warranties”. Part of what a maintenance contract promises is not only free replacement of parts, but also no-cost labor for that repair. Sometimes a faster level of response time is guaranteed in the agreement too.

Pricing

Generally, the price of a maintenance contract is related to the number of “active ports” on a monthly basis. Active ports are another way of saying “the number of devices connected to your system”. A general rule-of-thumb in the industry is $2-$4 per active port every month. For large organizations with a few hundred phone sets, this monthly figure can reach nearly $1,000. And, for a small business, money is money and the smallest amount can seem like a big expense.

Big Profits

Maintenance contracts are big money-makers for the sales guys. The pricing is setup to highly favor the maintenance company over the long haul. Those who used to be in the PBX sales industry can tell you that it is openly discussed inside the office that a high-margin maintenance contract means big profits for the sales team. The percentage of commission is usually higher on a maintenance contact than on just the phone hardware.

Not a Necessity

It’s not a stretch to think of a PBX maintenance contact as an insurance policy. Many of us pay for homeowners’ insurance and never need to file a claim. So why do we do it? Peace of mind.

But, do you really need it? When your system is brand new, the likelihood of components failing is very low. Almost all new PBXs are covered by warranty for the first year. Any component that is faulty will usually show up in that first year anyway. Most of the time if a phone system is irreparably damaged by lightning, it is covered by business insurance policies.

Unless the maintenance is somehow inextricably tied to the initial sales price, they usually don’t make any economic sense for the first 5 years. However, after the five-year mark the chance of component failure begin to creep up. Heat, dust, and electrical irregularities begin to take a very slow toll on the electric systems and make them more fragile.

Usually, it is not necessary to purchase a maintenance contract on the day of installation. Many companies will be happy to sell you a maintenance contact on any existing system no matter how old. You are not obligated to get maintenance coverage from the company that sold the system either. Shop the competition. Ask them what they can do for you.

An Exception for Every Rule

There are some business managers who prefer the peace-of-mind knowing that they pay a flat fee every month and never have to worry about costly surprises. Moreover, a maintenance contract may need to be considered if your organization is vitally dependent on PBX uptime. In other words, if your whole money producing activities would grind to a halt when the phone system went down, then maybe the maintenance contract makes sense.

An Ounce of Prevention for a Pound of Cure

There are a few simple things you can do to protect your system that will help ensure long life use regardless of whether you choose a maintenance contract. HEAT and Lightning are the number one killers of any electronic system. Ensure that your system is installed in a location that is clean and cool. Also, inquire at the time of installation that there is surge protection on both the electricity supply and the phone lines connected to the system. Periodically check for dust build up on the cabinet’s vent holes. A quick vacuuming once every 6 months can make a big difference in the long run.