What It All Means: Caveat Emptor
Although NAD's current Oracle vs. IBM inquiry seems settled for now, customers haven't seen the last of confusing, misleading, hyperbole-filled vendor ads touting the superior price/performance of a particular high-technology maker's product over rival wares.
The rivalries among all competitors -- from Apple to Zynga and everyone in between, like Oracle and IBM -- will only intensify as vendors fight to retain their existing customers and expand into new and more lucrative product markets. Users should read the fine print and not accept any vendor's claims at face value.
The continuing economic crunch puts users in a position of power and potentially provides lots of leverage to negotiate better deals. This assumes, though, that businesses are willing to flex their muscles and fight for better deals.
Vendors, when pressed, are often willing to offer many types of incentives to upsell an existing account or secure a new customer win. Vendors use a variety of lures, ranging from deeper discounts and better licensing terms and conditions to extras that may include items like free or discounted training, technical service and support, price caps -- or even some free products or inclusion in select alpha or beta test programs.
The moral of NAD's investigation into Oracle's price/performance claim against rival IBM is caveat emptor -- Latin for "buyer beware."
To reiterate, there are good deals to be had, but the overwhelming majority of organizations must fight for them. That means wading through the vendor hype, performing due diligence, and conducting an apples-to-apples comparison of the specific features, functions and capabilities of their intended infrastructure purchases, including servers, desktops, storage, virtualization and cloud.
All businesses -- from SMBs to the largest enterprises -- should also do a thorough review of the terms and conditions of their current licensing agreements. Organizations should perform their own price/performance comparisons and challenge vendors to back up their claims.
In order to get the best deals, businesses should take the following steps:
the performance and after-market technical service and support they receive from their vendors, and provide the vendors with constructive feedback -- both good and bad.
Challenge all vendors to match or beat pricing on specific products. While it may be difficult to get a big discount on a hot item like an Apple iPad, that's an exception. Corporations -- from the smallest SMBs to the largest enterprises' named accounts -- can almost always negotiate a better deal. How good a deal a company gets will vary according to the size and scope of the individual contract. Shaving costs also assumes that the business is in compliance with its current licensing Ts&Cs.
Familiarize yourself with the standard list prices and discounted street pricing of all computer equipment. This will make it difficult (although not impossible) for a less than reputable sales person to oversell an item that could cost your firm thousands or millions. If you're not convinced that your reseller or sales account representative is giving you a decent deal, don't hesitate to ask to speak to a superior. If you're still not satisfied, you can always walk away. Chances are good the vendor will be back.
Construct an itemized list of everything that's included in the Total Cost of Acquisition (TCA). It's crucial to perform a head-to-head comparison of everything that's included in the purchase price -- from the actual hardware to the service, support and maintenance contracts, so your firm won't be duped by misleading ads and get a nasty surprise when presented with the bill. Organizations should also involve all pertinent parties in purchasing decisions, including chief executive officers (CEOs), chief technology officers (CTOs), VPs of IT, IT managers and network administrators.
Finally, if something looks too good to be true, it probably is. Or if a vendor claims to be undercutting the competition by a vast amount -- such as Oracle selling its SSC T4-4 server for more than $3 million less than IBM's competing Power 795 Server -- then it is most likely specious. As the famous showman P.T. Barnum noted, "There's a sucker born every minute." Don't be one.
Laura DiDio is principal at Information Technology Intelligence Corp. (ITIC), a research and consulting firm that covers the high-tech industry.
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