Vendors try new lock-in tricks

Vendors try new lock-in tricks

IT managers are unconsciously falling prey to a new form of vendor lock-in, whereby control of IT infrastructure through outsourced management of non-core IT functions is wrested away from the business under the guise of 'on-demand' computing services, a senior Gartner analyst has warned.

Gartner vice president Betsy Burton told Computerworld that as IT suppliers move from a product-based model to a services delivery model, they are looking to take charge of more parts of businesses' IT environment.

Burton said that with enterprises under continuing pressure to slash operating costs and alleviate the resulting pressure on staff, buyers of software, hardware and networking inadvertently become submissive to vendors when handing them responsibility for their non-core IT functions.

Wary of buzzwords, Burton challenges whether offerings such as virtualisation, utility, autonomic, on-demand, and grid computing add up to increased "customer choice" or merely new forms of vendor control – naming IBM, Microsoft, Oracle, SAP and Siebel as the most likely predators to come after non-critical corporate IT through such services.

Perth-based Wesfarmers Energy's IT manager Bill Advic is one buyer tired of such tactics.

"It's a dog-eat-dog world for [vendors, they] will always be like that. Not only are they trying to keep your business, but they're also trying to get more out of their customers," Advic said.

Advic said suppliers attempt to "buy your business by coming in with another product or service" within existing offerings.

"For hardware companies, it's mini servers or laptops that aren't particularly market-leading or part of an original negotiation. [They] tend to know you may be in the market for an upgrade…or you'll hear from a recruitment agent if companies are looking for particular sorts of IT skills," Advic said, adding vendors are still willing to sell at or below cost to win new business.

When vendors look to bloat out existing contracts, Advic recommends standing firm and reminding vendors that the customer comes first.

"Their reputation is at stake if they can't show they understand my business."

Only Cisco and Telstra have excelled in these stakes, because they took an active interest in his business, he said.

Gartner's Burton warned that organisations must understand the traps of becoming dependent on a vendor, saying business specialists need to carefully evaluate the cost and benefit of reliance.

"Take advantage of competition or partnerships to negotiate better deals, and ensure there is shared risk in service-based engagements." Burton said.

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