The client decided to purchase all the IT they needed in the US instead of the EU.
When the client first started to look at how to get a datacenter up and running in the EU, where they had no local staff or experience, they looked at consolidating their purchases in the US.
During a pricing exercise, they realized that if they consolidated their international and domestic spend, they would have better volume pricing and SLAs across the board. The discounts gained from consolidating would cut their international hardware cost by ~25% when compared to purchasing in-market.
The hardware cost was also flat out cheaper (before the discounts were applied) in the US than in-market pre-discount. The numbers worked out, as long as they had a way to get the hardware from the US to the data-center in Amsterdam.
When we were approached with the above brief to get the hardware to AMS and to also install it, we knew that even though it would be cheaper to get the hardware in the US and deploy it to the international site on the basis of their discounts and price arbitrage alone, there was more room for the client to save on costs.
“The discounts gained from consolidating would cut their international hard- ware cost by ~25% when compared to purchasing in-market.”
So, we crafted a solution based on the below suggestions:
→ The equipment would be drop-shipped to our facility in NJ directly from the distributor. We would be able to receive and hold the equipment as it came in (storage for the first three months was free of charge, but most of our shipments ship within the first two to three weeks of receipt) and we’d be able to provide inventory visibility to the client. They would then be able to tell us exactly what they needed deployed and when, no matter what vendor it was ordered from, or how it arrived at the FGX warehouse.
→ Ideally, we would want to deploy as much hardware as possible on a single shipment to take advantage of the fixed costs of shipping. When you ship internationally, there are fixed costs that are incurred on a shipment by shipment basis, and by consolidating as much as possible into a single shipment, you reduce the deployment cost per item.
For this particular shipment, we did one bulk shipment for the primary equipment required for the main installation, and 22 just-in-time shipments for additional equipment as it was ordered.
By following the above, the client saved $450K and their hardware was installed in the Amsterdam data-center in about 2 weeks. They also saved their team hundreds of hours of liaising with and managing multiple foreign hardware VARs for their IT purchases and smart-hands service vendors for the installation of the hardware.
After they purchased everything from their domestic vendors, FGX managed the receipt, inventory management, door-to-door deployment, and installation of the hardware.
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1 - RECEIPT OF THE HARDWARE & INVENTORY MANAGEMENT
The client placed their orders with their US vendors and had them drop-ship the equipment straight to our facility in NJ. In order to ensure that all stakeholders had full visibility and control over how the project was moving along, we tagged each individual piece that arrived at our warehouse with a unique barcode.
This barcode was linked to an online portal that the client was able to access which contained the item’s information (pictures of the manufacturer’s label, packing list, serial number, client’s asset tag.)
Using the project tracker we provided them, they were able to confirm that the distributor had sent the right equipment and quantities and also advise us on exactly which components were the most crucial to deliver first.
We also coordinated with the client’s hardware vendors to ensure that we had accurate lead times for when the equipment would arrive at our facility. Because the equipment was spread across 13 manufacturers with 433 different components, an organized database was crucial for putting the client in a position to track and advise how they wanted to manage the deployments.
The client had full visibility into the process from drop-ship to final delivery. They would be able to see the status of each individual component from arrival at FGX to final installation.
Since the client could see which devices were received and ready to ship, they had the choice to deploy the exact components they needed, when they needed. This was useful when it came to deciding which devices to bulk ship to take advantage of fixed costs and which to ship “just-in-time” in the scenario the manufacturer had a production delay.
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2 - PHYSICAL HARDWARE DEPLOYMENT TO AMSTERDAM
When we received the majority (~80%) of the total hardware that would be deployed to Amsterdam, we were given the green-light to ship out. The devices we shipped were based on what the client had approved via the online portal.
Our warehouse team pulled each approved device and packed them onto 22 pallets in total, all wrapped with anti-static shrink-wrap and a layer of cardboard for safe transit. During this time, FGX’s customs team had all the shipment’s customs documentation approved and the duties and taxes pre-funded to ensure it would clear as soon as it arrived in-country.
Once the shipments were ready for export, we belly-loaded them onto direct flights for routing into AMS.
Upon arrival in AMS customs, our local team started the customs clearance pro- cedures. Because the client did not have a business entity in the Netherlands that was eligible to import, we acted as the importer on their behalf. The shipment cleared the same day it arrived, and was trucked via a dedicated vehicle straight to the data-center where our smart hands team was standing by to receive.
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3 - SMART HANDS INSTALLATION
Our client planned to send their senior engineers to the data center but due to the scale of the deployment, they needed our local team to assist with the in- stallation. The additional upside of having us involved in the smart-hands part of the process is that there’s no lag between the deployment of the hardware into Amsterdam, receipt at the data-center, and final installation.
As soon as the hardware arrived at the data-center, our team unpacked, inven- toried, and brought the hardware to the client’s cage. Each device was asset tagged and rack mounted in accordance with the client’s guidelines and eleva- tion diagrams.
Over 400 devices were installed across 30 cabinets in 2 weeks. The final step was the client audit, where the client’s engineers arrived and confirmed that the setup was as they had planned. When everything was confirmed to be good by them, we further assisted with installing the airflow accessories, grounding cables, and fiber/ethernet uplinks.
The equipment that didn’t arrive with the bulk of the shipment was shipped to the data-center as soon as they were received in our US warehouse. There were 22 just-in-time shipments in the two week span that we were installing the bulk of the hardware.
Centralizing the procurement of hardware provides more than just a cost advantage (albeit saving 12-25% on cost is a large motivator for centralizing.) The act of centralizing enables many different types of efficiencies to be created for the asset being centralized because everything is in one place. Whether that efficiency is inventory management, a hardware security checkpoint, or centralized configuration prior to or after deploy- ment, these are all services that can only be feasible if procurement is centralized.
So, although our core competency lies in deploying IT hardware internationally, FGX’s product lies in provid- ing these efficiencies for our clients. If you’re interested in the centralization model, please request our white paper by emailing us at email@example.com.