Who Loves the Incumbent Vendor? - InformationWeek

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12/26/2008
10:00 AM
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Who Loves the Incumbent Vendor?

Imagine you have been using a particular vendor's technology for the past five or ten years... Now it's time for an upgrade, or even a replacement of that technology. The product did what it was supposed to do at the time, but now technology has moved on and it's time for a refresh... Make sure you consider both sides of the double-edged sword of incumbency.

One of my favorite little phrases is "double edged sword," and I found a perfect application for it recently: the discussion of "incumbent vendors" - those whose product(s) you're already using.

Imagine you have been using a particular vendor's technology for the past five or ten years. It could be EMC|Documentum or Open Text or any one of the 197 other products CMS Watch evaluates. I'll just call them Vendor X. But now it's time for an upgrade, or even a replacement of that technology. It did what it was supposed to do at the time, but now technology has moved on and it's time for a refresh. So you're kicking off a major project and starting up the RFP and shortlisting process.On the one hand, being the incumbent, Vendor X is at a real advantage to supply this new technology over anyone else. They have an existing relationship with the IT group, procurement department, and at least some business users. So they know you and they know your business to some degree. Equally important they know your IT expectations and limitations. Of any vendor they are the ones to beat, and should be able to not only pitch, but price at a point that will make you smile.

On the other hand, they are now the "old" supplier and as the Eagles once so perfectly put it, "wooo-hooo... everybody's talking 'bout the new kid in town." Whereas by default the incumbent comes with baggage. For nothing is ever perfect, and the last few years will have had its ups and downs, and of course it's only human to focus on the downs. Put it this way: if you think its time to upgrade or replace, then you likely think of the incumbent as dated.

Another twist in that two-way relationship is that you know a lot of dirt about Vendor X - dirt you don't know about their competitors. The maintenance calls that were never properly closed, the bugs, the eventual fixes, and the license fee hikes. In that situation, who would want to be the incumbent?

Sometimes incumbents are going to win regardless, but it's not always an advantage. The key here for you the buyer is that incumbents require a particular type consideration. So, when automatically adding Vendor X to your shortlist, or conversely when deciding not to add them, make sure you come to the decision in a balanced manner, that you have looked at both sides of that double edged sword.Imagine you have been using a particular vendor's technology for the past five or ten years... Now it's time for an upgrade, or even a replacement of that technology. The product did what it was supposed to do at the time, but now technology has moved on and it's time for a refresh... Make sure you consider both sides of the double-edged sword of incumbency.

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