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Networking VendorMath

by Andrew Lerner  |  October 19, 2016  |  Submit a Comment

Vendormath…We’ve all seen it…it looks something like this…

vendormath

From the vendor’s perspective, it always shows that “our stuff” is sooo much better financially than “their stuff” (note: a slight deviation to this is when “their stuff” is 4% cheaper in year 1, but over X years, our stuff is much much more cost effective). While this certainly applies to multiple areas in and out of IT, we’ll keep it focused on networking…

I often wonder why vendors waste their time, because the typical customer reaction is to basically ignore this.  Vendormath typically elicits responses such as a) throw up a little bit in your mouth, b) conduct eye roll and c) put zero faith in these numbers. In addition, most vendors don’t truly believe this stuff either, because it is so fabricated in the vendors’ favor.  It’s akin to saying Andrew Lerner can run faster than Usain Bolt, which (maybe) true if I am running on a 35% decline with a 50 mph tail-wind while Usain is carrying a 120 pound barrel on his back running a 40% uphill into a 90 MPH headwind….

Unfortunately, I don’t anticipate that vendors are going to stop doing this, but maybe – just maybe, there is some value to be derived.  So, next time a vendor shows you a vendormath slide, tear into it.  Ask these questions:

  • What specific product or service is that, including SKUs?
  • What discount was assumed for that product (i.e., show me BoM)? – You never know, to make it look good, maybe they applied a 70% discount, and that gives you negotiating leverage if your standard discount is 45% 
  • What level of maintenance and support?
  • What term length?
  • Are soft dollar savings included, like OPEX? Make sure these assumptions are clearly called out such as:  IF you buy this product, you’re staff will spend 50% less time doing X.  How many less hours, and doing what specific tasks.  What labor rates were you using?

These all help you to identify how (un)realistic the comparison is.  Also, be sure to ask  what specific competitors’ products/services the comparison is based on, including…

  • What specific product or service, including SKU (show me the BoM, again)?
  • What competitor discount was assumed?
  • What level of maintenance and term?

This gives you some (biased) intel on that product (take with a heavy dosage of salt). It is highly unlikely the comparison is apples to apples. For example it would be common to see the latest fixed-form factor switch compared against a competitor’s 7-year old chassis-based switch.

So the next step is to (innocently) ask their competitors if it is a valid comparison.  They’ll tell you it isn’t, and in addition to describing the numerous flaws, they’ll probably present their own #vendormath with equivalent bias (and you can ask your questions above again).  BTW, You can also call Gartner, we’ll be happy to tell you what we really think of it…

Perhaps I’m overly optimistic but maybe just maybe we can change the industry a little if we do this.  Maybe vendors will be less likely to be as outlandish if we hold them to higher standards and ask detailed questions, or they will stop doing them all together.  We can dream…

So be ready the next time the sales team throws one of these up…

PS

Please free to post any public links to any good or bad ones.

 

Category: it-cost-optimization  networking  

Tags: vendormath  

Andrew Lerner
Research Vice President
4 years at Gartner
19 years IT Industry

Andrew Lerner is a Vice President in Gartner Research. He covers enterprise networking, including data center, campus and WAN with a focus on emerging technologies (SDN, SD-WAN, and Intent-based networking). Read Full Bio




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