The Challenge with Buying Technology

By Steve Gutzman

  Technology – information or otherwise – has always been a tough subject to discuss, to explain, to comprehend, to predict, and most important, to buy.  Why is that?  One reason is that it is very difficult to predict its usefulness, longevity, or value over time.  Even the people who develop technology have a tough time with this.  Some examples …

“The world potential market for copying machines is 5,000 at most.”  These are the words of an IBM executive in 1959 to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production.

“There is no reason anyone would want a computer in their home.”  Such is a comment from Ken Olson, the president, chairman, and founder of Digital Equipment Corp., a manufacturer of big business mainframe computers, as he argued against the personal computer in 1977.

“There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States.”  This was Thomas Craven, Federal Communications Commission member, in 1961.  The first commercial communications satellite went into service in 1965.
But there have been some predictions that proved to be pretty accurate and quite relevant to our industry.

Moore’s Law, which was coined by Intel co-founder Gordon Moore in 1965, states that the number of transistors on a chip doubles every 24 months.  It has been the guiding principle of the high-tech industry and explains why that sector has been able to consistently announce products that are smaller, more powerful, and less costly than their predecessors – a price-performance curve that other industries can’t come close to.  The interesting thing about Moore’s Law is that it is not a law of physics.  Rather, it is just an uncannily accurate observation on what engineers and computer scientists, when organized properly, can do with silicon.

Gilder’s Law, named after the visionary author George Gilder, states that bandwidth grows at least three times faster than computer power.  This means that if computer power doubles every 24 months, then communication power doubles every eight months.  The backbone bandwidth on a single cable is now a thousand times greater than the average monthly traffic exchange across the entire global Internet five years ago.

And finally, Metcalf’s Law, named after Robert Metcalf, an originator of Ethernet and the founder of 3Com, states that the value of a network is proportional to the square of the number of users; so, as a network grows, the value of being connected to it grows exponentially, while the cost per user remains the same or is even reduced.

Whether examined separately or collectively, these three laws are driving our industry to new heights.  But they also present some big challenges for those of us who are in the “buying trenches,” for we have to figure out how to put all this breakthrough technology to good use.

What we know about the world doubles every 10 years, and information technology is leading the way.  Magnetic nanodots will soon enable storage of over one billion pages of information in a chip that is one square inch in size.  This will be followed by imaginary interfaces, iMAX at home, content-centric networking, massively parallel cortical simulators, and quantum computers.  The pace of technology invention is accelerating exponentially, and how we buy it must keep pace.  And as we will see, not only is technology changing rapidly, but our vendors are also more sophisticated in how they bring their solutions to the marketplace and in the selling techniques they use.  Therefore, we cannot rely on the old tried-and-true buying techniques of yesteryear.  We must continually upgrade our buying skills, techniques, and processes.

Remember, if you don’t have a plan on how to buy technology, you will default to the vendors’ plan on how they sell technology.

Steve Gutzman is a senior advisor at ICN and a 32-year veteran of  the high-tech industry.  You can contact him at
info@dobetterdeals.com .

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How to Calm Your Brain During Any Storm

How to Calm Your Brain During Any Storm

There is a major storm in our economy currently. Understandably, this situation adds stress to negotiations. When you’re overly stressed the chemistry in your brain changes. Your problem solving abilities are reduced and your judgment is greatly diminished. In fact, it is a very similar state as being drunk! This is no state to be in when making important decisions during negotiations.

Here are some simple steps to take to begin to relax and reduce the effects of stress on your brain:

  • Take at least 3 deep, slow, regular breaths – this will start to slow your heart rate, lower your blood pressure and restore cognitive clarity.
  • As you breathe, let your shoulders relax and loosen your jaw – you may be surprised at how much tension you hold in your jaw.
  • Focus your mind on the present moment – to help with this maybe focus your attention on your breath passing through your nostrils as you breathe, or pick a spot on the wall and focus your eyes gently on that spot. When focusing on the present moment you prevent yourself from regretting the past and fearing the future – both of which increase stress. (For a deeper understanding of this concept, read The Power of Now by Eckhart Tolle.)
  • When uncomfortable feelings arise, don’t try to ignore them but acknowledge and label them – recent research at UCLA proves this allows you to detach from negative emotions so they do not hijack your calmness.

Once you begin to relax your mental clarity will begin to be restored in your brain. Will this calm the outer storm in our economy? No. But it will calm the storm within you and make you less likely to do something irrational during negotiations that you will later regret.

About the author: Jonathan Jordan, a member of the prestigious Society for Neuroscience, is an entrepreneur, Certified Business & Executive Coach, international speaker and ocassionally speaks at ICN conferences.  You can contact him via e-mail at Jonathan@MindfullyChange.com.

The Professional Acquisition Philosophy

Nearly twenty years ago, we developed the Professional Acquisition Philosophy.  Its tenets are as relevant today as they were then.  These relationship fundamentals are worth reviewing.

The professional acquisition philosophy is set around the following axioms:

  1. In any major business transaction, both parties have a right and, indeed, an obligation to determine the goals and objectives that they wish to achieve in the transaction.
  2. The goals and objectives desired by one party may create actual or potential costs or risks for the other party. Where this circumstance occurs, the party facing such costs or risks has a right and an obligation to identify the costs and risks and to limit or protect against them or, alternatively, to require additional consideration for accepting them.
  3. Responsibilities, costs, and risks should be discussed, understood, and allocated in an honest and open business manner. Although the advocacy and sales process almost always results in the use of puffery and convincing argument, both sides should avoid efforts designed to foster or permit misunderstanding and deception, regardless of source or reason.
  4. Honest mistakes and misunderstandings may occur in the negotiation of any complex business transaction. Neither party should falsely claim such problems, but where these problems occur both parties should work honestly toward their resolution.
  5. The best contract is one which accurately sets forth the mutual understanding of the parties on all relevant issues. Such a contract invariably involves compromise, both in substance and specific language. This type of contract should be the negotiating goal.
  6. A good contract must contemplate that one or both parties may fail to perform their obligations under the agreement for any number of reasons, including reasons beyond their control. Therefore, the contact should include clear standards of performance and remedies. Such an approach may actually reduce the likelihood of major disputes, by specifying the mutual obligations of the parties on all relevant issues.

            The professional acquisition philosophy recognizes that, in an ideal world, the best method of achieving optimum and mutual success at the bargaining table is for both parties to work together in a professional atmosphere to agree on how responsibilities, costs, and risks will be allocated, and to document the resulting compromise in a clear contractual agreement.

            The philosophy requires that each party treat the other as a professional to be respected for his or her honesty, expertise, and mutual desire to fairly document and consummate the transaction. In this regard, the philosophy requires a cooperative negotiating environment rather than an adversarial one. It also requires that each party be willing to listen and respond to the concerns expressed by the other side.

            In the professional philosophy, neither side “wins” in the traditional sense. Indeed, it might be said that neither side wins unless both sides win. As a result, negotiating factors such as aspiration level and psychological leverage must be directed away from achieving victory at all costs and toward achieving an acceptable, fully-understood, and well-documented compromise. Ploys and manipulative strategies and tactics have no place in negotiations governed by the professional philosophy.  Despite this fact, advocacy, sound reasoning, and effective, forceful communication play strong roles under the professional philosophy.