Vendors and Partners

In the sysadmin business, a large part of our job is often to purchase hardware, software and services.  Unfortunately, as technologists we often tend to focus almost exclusively on the products themselves, and not as much on the supplier./

Of course, you have to find the products that meet your technical needs, but there can be additional, non-technical requirements that should be considered.  One of the most important non-technical considerations is the supplier.

In many cases, the supplier can be as or even more important than the product itself.  This is why it is so important to decide if you need a vendor or a partner.

A vendor has a product that they want to sell to you.  It might (or might not) meet your needs, but it’s really up to you to know.  If you buy it and it works as advertised, but doesn’t solve your real problem, that’s still your problem.  You might get great support from the vendor, but support isn’t the real difference.   The product is what it is, take it or leave it.  The transaction with the vendor is just that, an arm’s length transaction.  With a vendor, you get what you pay for (if you are lucky) but rarely more.  A vendor may fall back on the terms of the contract if there’s a problem.  They’ll provide what you’ve paid for, and what they’ve committed to provide, and rarely more.  A vendor is more likely to be selling you a commodity product or service, where there are few or no differentiators other than perhaps price.

Microsoft is the epitome of a vendor.  They have products, and if you need them, you buy them.  You get what they have to sell, no extensive customization, and you’ll get exactly the support that you pay for.  Their success is not tied to yours.  Even if you fail, they have enough other customers that they can still succeed.

A partner is truly different.  You’ll start to know if you have a potential partner from the beginning of the relationship.  A potential partner will be asking question about your company, your culture, your goals, and the problems that you want to solve.   They’ll make sure that you both understand the real problem, not just the problem that their product will solve.  A partner will consider making reasonable changes to their product to better meet your needs.  A partner is more interested in a long-term business relationship that may not pay off for some time, not just making the immediate sale.  A true partner will tell you if they do or don’t have a product to meet your needs.  They may even recommend a competitor’s product, or something from one of their partners.  A true partner may forgo immediate profit if it’s in your best interests.

Don’t expect this to be a one-way street, though.  A partner is making this long-term investment in the relationship in the hope that it will eventually pay off.  Of course, so are you.  After all, they’ve got to make a profit at some point, and you need the additional value that you get from a true partner.  They will be expecting that when they do have the right solution, they will have at least the first shot at making the sale.  They may also expect that they’ll become your preferred vendor.  In extremely strong partnerships, developed over a long period of mutual success, they may expect to at least get extra points on the evaluation scorecard based on their past performance and the strength of the relationship.  A partner can’t be fully successful unless you are.  They’re willing to put some of their skin in the game.

Obviously, what I’ve described are opposite ends of a spectrum.  Few companies will be at either of these extremes.  At each procurement, you’ll have to decide how far you’ll need to look towards these two endpoints.  At the vendor end, you’ll be expecting price to be the biggest differentiator among very similar commodity products and services.  At the partner end, you’ll be buying more custom solutions and expect to pay for that flexibility.

I work for a Japanese company.  Part of the corporate culture is that we seek partners where it’s appropriate, not just vendors.  One of the Japanese values is the expectation that we will form strong relationships with some of our most important suppliers.  For the highest value products we need, we’re expecting that the partner will take on some of the risk as well.  We’re more likely to look for a partner when the project has more risk, when we think we might need significant high-end support, we might need some customization, or when we expect to need to make a large investment over time.

Over the past years, we’ve had the best luck with small to medium companies.  We’ve had the strongest relationships with companies that have done their homework before the first meeting.  We’re part of a large multi-national, with many component companies with similar names.   Potential partners who know who we are, as opposed to our sister companies have taken the first step towards a strong relationship.  Some of these relationships are now eleven years old, some are six or seven years old, and other are still being formed, some have ended.  These partner relationships are constantly being reevaluated.  Some former partners have been replaced with new partners.

The best suppliers have spent more time asking about what we’re trying to accomplish than in telling us about their product line.  In many cases, we’ve been one of their larger (but never their largest) customers.  Their success has been intimately intertwined with ours.   They’ve been willing to make changes to their base products (or create new products) to meet our needs.  We’ve been willing to pay a little more for something that isn’t a run of the mill commodity product.  When we’ve had problems with the products, these companies haven’t stood on the support contract, they’ve gone above and beyond to just make it right.

As you make your purchase decisions, think about what you need in addition to just meeting the technical specifications.  Do you need a vendor or a partner?   Are you willing to make the effort to build the relationships that lead to great partnerships?  Will your management see the value of partnerships for some of your most critical purchases?  That’s part of your job, making the case when it’s the best thing for your company.

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