Picking the Right Supplier in a Recession - InformationWeek

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2/13/2009
09:19 AM
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Picking the Right Supplier in a Recession

"Nobody ever got fired for choosing IBM" -- so the saying goes. And in tough times there is, without a shadow of a doubt, a tendency for procurement and IT buyers in general to lean heavily toward very large (or incumbent) vendors, on the assumption that they represent a lower risk. But consider the following examples based on real vendors:

"Nobody ever got fired for choosing IBM" -- so the saying goes. And in tough times there is, without a shadow of a doubt, a tendency for procurement and IT buyers in general to lean heavily toward very large (or incumbent) vendors, on the assumption that they represent a lower risk. But consider the following examples based on real vendors CMS Watch covers in its evaluation services:

Vendor A: Is a household name, one of the top IT companies in the world (not, in this case IBM). Yet this particular product set comes out of a division that is of little current interest to the mother ship. It gets limited funding, does not attract the best personnel and if it doesn't turn more of a profit in the coming year it will be axed and its products "sun-setted." As a buyer you will likely know none of that. What you will know is that when the vendor comes along and provides the dog and pony show, you will be dazzled by the scale and security of buying from household name "Vendor A."

Vendor B: Is a rising star, and in fact the larger analyst firms say that this firm currently leads the pack in their chosen field. However, despite their fame and current prominence in the industry they are yet to turn a real profit. Their private status masks the fact that they are heavily reliant on venture capital funding and that their VC backers are keen to offload them while they remain popular.

Vendor C: Is a small firm with fewer than 100 employees, it is profitable and has no debt and is staffed by enthusiasts who are dedicated to the product and the vision of its creator. The firm though has limited resources to market itself, gets virtually no coverage from the large analyst firms and is unlikely, along with being somewhat unwilling, to grow substantially in the future.

Clearly all three vendors come with inherent risk, one can argue the merits of any one of them and indeed different buyers will have different views, assuming that is, that they have the full facts with which to come to a balanced conclusion. The difficulty that such buyers face is one of the key reasons they engage firms like CMS Watch to help in the decision-making process. Though ultimately of course the decision though has to be yours alone.

So... which one would you chose?"Nobody ever got fired for choosing IBM" -- so the saying goes. And in tough times there is, without a shadow of a doubt, a tendency for procurement and IT buyers in general to lean heavily toward very large (or incumbent) vendors, on the assumption that they represent a lower risk. But consider the following examples based on real vendors:

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