They’re Your Vendor Not Your Partner ~ Revisited!

            You know it’s a recurring theme of this column to take pot shots at companies that insist that their suppliers are their partners.  Well, here’s a true story – the names have been changed to protect the guilty.

            A few years ago, our organization was called in to make a presentation to senior executives of a well-known communications company.  Our Executive Briefing focuses on the role of effective technology procurement in achieving overall business objectives and includes a segment called “The Ten Truths in Technology Negotiations.”  Naturally, one of the truths is your vendor is not your partner.

            The senior-most executive in the room took great exception to that fact and went off on a rant about how all their suppliers are their partners and how contentious and negative we were to even imply that suppliers should be treated as anything but partners…

            Needless to say, we weren’t invited back.  But the story gets better.

            Two years later, we received a RFP from the company inviting us to bid on renegotiating their maintenance agreements.  It seems that they discovered that nearly fifty of their “partners” were overcharging them for maintenance.

            Mr. Senior-most Executive is no longer with the company. 

Our guest blogger is Dan Wallace, a staff member at ICN and Caucus-The Association of Technology Acquisition Professionals. For advice on how to renegotiate your maintenance contracts, contact ICN.  If you have a story worth sharing, please contact ja4@dobetterdeals.com. 

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Beware the Appliance?

By Dan Wallace

 
A recent issue of InformationWeek (Sept. 27, 2010) featured the “Rise of the Appliance” on its cover. My first reaction was a flash-back to those scary borgs in sci-fi movies. After reading the feature articles, I’m just as scared.

It seems that all the “Big Boys” – the Oracle’s, IBM’s, SAP’s, H-P’s, and others – are stirring the pot to create crazed excitement and demand among IT professionals for software-plus-hardware systems. InformationWeek seems to be falling for the idea, calling them “game changers.” Businesses want highly integrated hardware, software and operating systems that speed up their ability to analyze data to better serve their customers. Sounds great, right?

It sure is. And that’s why the vendors are pushing the idea as the latest and greatest technological development. Appliances are expensive. And because they’re expensive, buyers have to commit to them for the long term. For vendors, that means substantial long-term profits.

In an era where budget constraints and economic pressure is the number one challenge for IT executives, does it really make sense to lock yourself in with one vendor supplying your data appliances? Do you really want to be in bed with Oracle (for example) for the next five years? Do you really want to invite a supplier to become an “entrenched” supplier and lose your future negotiating leverage?

If you believe Larry Ellison, appliances will become the greatest technology on the face of the earth. And we’ll all be at the mercy of the suppliers. Hmm… Maybe the sci-fi borg analogy isn’t such a stretch.

Our guest blogger is Dan Wallace, a staff member at ICN and Caucus-The Association of Technology Acquisition Professionals. For advice on negotiating with entrenched incumbent and single/sole source suppliers, contact ICN.