After two weeks at Forrester’s IT Forums (in Las Vegas and Barcelona) the Sourcing and Vendor Management research team came back more energized than ever. Why? We were able to spend a week interacting with our clients, who all face diverse challenges, yet remain very optimistic about the strategic value they can provide to their IT and business counterparts. While it's an exhausting week for all of our analysts, we love this week (second only to our own team's Sourcing and Vendor Management Forum in November) because of the chance to interact with all of you.
Coming back from this conference, I realized a few key themes had dominated my conversations with clients:
A couple of months ago I was blogging from sunny Barcelona with the Red Sox 0-6. Now I'm in Barcelona again for our IT Forum, but this month its raining heavily here, while back in UK we officially have a drought. But the good news is that Boston is 6-0, at least in Yankee Stadium. A lot can change in two months.
The same is true in IT. Just now, Microsoft faces threats to its strong market position from many directions, and Steve Ballmer is under pressure, but strong results for its June fourth quarter could deflect the flak. That's one reason why sales teams will have greater incentives than ever to close Enterprise Agreement deals in the next couple of weeks. Hopefully if you're negotiating an EA right now, whether a new deal or a renewal, you've read my report Consider These Five Criteria When Choosing A Microsoft Volume Licensing Program and maybe even had an inquiry call with my colleage Christopher Voce or me. One common question we get is whether the stated deadline to accept an offer is real, or will the same deals be available in the last days of the quarter or even in the subsequent months? The short answers are Yes, it is, and no, they won't." Microsoft has its own deal approval processes that take time to complete, and though it won't want to reject Purchase Orders, it may have problems processing them if they arrive too late. And the deals available almost certainly wont be as good next quarter because sales teams will still have 9 months remaining in which to recoup any shortfall.
Today HP announced its new Converged Infrastructure solutions. The solutions include four offerings which are designed to help the enterprise IT organization with a one-stop shop for cloud and data storage solutions.
This move by HP offers a fix to the problem many IT organizations are facing: options abound in the marketplace for data center hosting/management, on-demand bursting capabilities, and cloud solutions. It can be confusing. HP packages these offerings up nicely to offer an end-to-end solution with a common management platform. HP's consulting services complements this and can even offer an upgrade path to move to a private/public/hybrid cloud. I believe the new Converged Infrastructure solution should help cut down on managing multiple vendors and move to a more consolidated and integrated approach, with faster deployment times.
However, the picture is not that simple as many complications arise around contractual performance metrics and SLAs. If the main idea of these offerings is speed-to-market, I'd specifically look into the following SLA considerations as you're preparing your business case and/or negotiations:
What are your scaling requirements? Some of the HP offerings include the bursting of on-site resources. If required, what would you need them to do and how quickly? What would the consequences be if they weren't able to hit those targets?
What are your security and contingency plan requirements? I would argue that SLAs in the cloud will differ based on your industry. If you're a healthcare provider building a cloud solution, your requirements may involve storing data in a private cloud due to HIPAA requirements. If you're a government organization, your requirements may involve certain data residing in a certain country.
I missed my chance today to save a young teenager from making a regretful decision. A boy in China sold his kidney in order to buy an iPad. I’ve been researching how companies can lower their tablet investments and source tablets more effectively. The report will be published shortly, but sadly not in time to give me a shot at preventing him from this reckless act. As you can see, all of this excitement surrounding tablets is enabling people to make ill-fated decisions with damaging consequences. In fact, several of my sourcing and vendor management clients tell me stories of their executives pushing through tablet purchases without really thinking through whether they’re getting the best price or service.
Though this teenager bought his, presumably, through a consumer sales channel, large enterprises have other options, such as working with VARs. In my research I found that OEMs reward successful VARs with rebates and incentives for hitting specific PC and tablet sales quotas. Even Apple Channel Managers target specific strategic accounts in key industries and create special programs for VARs to help accelerate OS adoption, all in an effort to strengthen Apple’s tenuous grip in the tablet business market. In my paper, I go into more detail about the advantages of the channel and present other sourcing alternatives.
Your situation may not be as tragic. However, you need to ensure that you help you steer corporate leaders away from getting lost in the excitement of this emerging trend, focus on the bottom line, and avoid a bleak prognosis. In my report I’ll share some insights I’ve learned from other SVM professionals, but I’d also love to hear any stories you have about having done an enterprise deal for tablets.
Assuming you didn’t have to give up body parts, what did you do to get a good deal?