Tag Archives: suppliers

Beware The Wolf In Supplier’s Clothing

As you all know, the economic climate of 2009 is a cold, cold winter indeed.  And like wolves starved by the cold and hardship of the season, our suppliers have turned feral.

When everyone’s sales slip due to the down economy, companies (and individual sales reps) are desperate to make their numbers.  How are they doing it?  By trying to jack up maintenance costs, in some cases by more than 100%!  It’s way more than isolated incidents; all our maintenance renewals coming up are meeting with hugely inflated quotes.  And not fly-by-night companies either, I don’t want to name names but let’s just say I am confident everyone out there has heard of all of them.

So protect yourself.  In your dealings with your supplier reps, start making it clear way ahead of time that your economic situation sucks too and you certainly expect that there’s a price freeze in place.  Don’t put up with it either – they know they’re going to make plenty of money off all the goons they send quotes to who will just rubber-stamp it and send it on so they can return to ESPNZone (I’m looking at you, State of Texas).  If you put up enough resistance they’ll go looking for easier pickings, just like those mean ol’ wolves do.    We had one outfit that wanted to jack up our maintenance cost by $125k a year, but luckily our IT director is a firm lady who has no problems with browbeating a sales rep until he cries.  In the end, we let them have a 5% increase because we ended up feeling sorry for them.

And have a backup plan.  If they really do have you over a barrel, then you’re low on leverage – you can try offering reference calls, presenting at conferences, and other handy non-cash incentives to them.  But when it comes down to it, you need to be able to walk away from them.  And to do this you need to plan ahead.  There are very few things that there’s only one of.  Have multiple suppliers lined up, and have a plan to change hardware or software if you have to.  Also look into open source, or third party support – even if it’s “not as good,” these days you have to decide how much good is worth how much money.

Now don’t get me wrong, we like to partner with our suppliers and treat them friendly.  Win-win and all that.  But good fences build good neighbors, and there’s nothing friendly about showing up and saying  “Hey, your operations will grind to a halt without our product, so stick ’em up and give me double this year!”

Be advised, that gleam in Bob the Sales Rep’s eyes will be a little hungrier than usual these days, and he’s gotta eat one of God’s little forest creatures to live.  Just make sure it’s not you.

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Beware the Deceptive SLA, My Friend

We’re trying to come to an agreement with a SaaS vendor about performance and availability service level agreements (SLAs).  I discussed this topic some in my previous “SaaS Headaches” post.  I thought it would be instructive to show people the standard kind of “defense in depth” that suppliers can have to protect against being held responsible for what they host for you.

We’ve been working on a deal with one specific supplier.  As part of it, they’ll be hosting some images for our site.  There’s a business team primarily responsible for evaluating their functionality etc., we’re just in the mix as the faithful watchdogs of performance and availability for our site.

Round 1 – “What are these SLAs you speak of?”  The vendor offers no SLA.  “Unacceptable,” we tell the project team.  They fret about having to worry about that along with the 100 other details of coming to an agreement with the supplier, but duly go back and squeeze them.  It takes a couple squeezes because the supplier likes to forget about this topic – send a list of five questions with one of them being “SLA,” you get four answers back, ignoring the SLA question.

Round 2 – “Oh, you said ‘SLA’!  Oh, sure, we have one of those.”  We read the SLA and it only commits to their main host being pingable.  Our service could be completely down, and it doesn’t speak to that.  Back to our project team, who now between the business users, procurement agent, and legal guy need more urging to lean on the supplier.  The supplier plays dumb for a while, and then…

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SaaS Headaches

There’s a lot of promise in the new SaaS (software as a service; what used to be called ASPs, or Application Service providers, till Microsoft crapped all over that acronym) and newer PaaS (platform as a service) spaces (and look for a steady stream of new “aaS”es to come).  However, there are a lot of gotchas in signing on with a SaaS vendor.  You’d like to be able to believe that they have decent performance, uptime, security, etc., especially after they tell you “Oh, all kinds of big companies use us; Dell, IBM…”  This is exacerbated by SaaS often being an “end run” around IT in the enterprise, so naive users can get sold a bill of goods without proper technical oversight.  SaaS is a big buzzword now, and there are a lot of startups springing up that do not necessarily have experience running large scale sites.  Think about how many MMORPG games still get scuttled due to poor operational performance.  SaaS is the same.

Here’s some things to keep in mind when selecting a SaaS vendor, laced with real life horror stories from our experiences.

1.  Performance/Availability.  Set a hard performance/availability SLA in the contract.  Many vendors won’t even have an SLA clause, or they’ll have one that says “99.9% uptime!” without any remedy clause for what if they don’t hit that.  You want a clear SLA with a clear measurement method and clear “money back” if they don’t hit it.  We use a 2 second global performance SLA as measured by a Keynote Global 35 monitor.  But the SLA isn’t the whole story – you are counting on these people to accomplish your goals.

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