Direct manufacturer support: the road to hell
Recently I received such a newsletter from a reputable company. I read, sat down and cried straight from how smoothly. They kiss right on the gums.
They may have it, but I have a little boiling, sorry. I tried to collect examples on the last occasions when something went wrong. Naturally, there will be no proofs, and further and further - no more than rumors.
To get started, let's take an excellent bunch of the striped operator and company, where the quality of the supplied iron is indicated directly in the name. Previously, the delivery was through Russian intermediaries, integrators, then they signed directly, eliminated the "extra link". Next is the clearest example of cost savings. The manufacturer cannot agree on a ruble contract to the Russian customer. The contract is foreign exchange, which means all currency risks, all costs for the operator. What happened to the dollar, you know.
As a result, neither a cheapening of the contract nor acceleration of deliveries was obtained, and no flexibility either. It is also important for the manufacturer to ship when he himself needs it. They have their own quarters, their reporting periods. And the customer needs it when the customer needs it. And these events may not coincide. Typically, the difference between these events is 6–9 months.
And that's not it.
If you start to hedge the ruble value, you need another third company to avoid currency risks. Plus, logistics directly without a rebuilt scheme is also far from the strongest side of direct contracts. Continuation of the direct procurement policy - the same operator entered into a contract with another company, let's call it “Moststroy Francisco”, and as a result, the service cost them such space money that the company was forced to refuse it. And everything was started just for the sake of this service.
One large bank, which is widely known for its queues, also threw intermediaries out of the process. But this time it was already concluded with another company - a server manufacturer, conditionally, “Three letters”. They decided to remove the intermediate link, instead received an increase in the value of the contract by 18-20%. The problem was that this manufacturer was very strictly spelled out what he was doing under the contract and what kind of extra money. And how fast it works. In addition, the manufacturer does not meet in any detail, because he does not have the opportunity to keep a warehouse, there is no way to do something faster than prescribed in the contract. The risks are high.
The bank has lost the level of service and SLA that it wanted. The manufacturer’s SLA is such that it is often impossible for a customer to put it into practice. As a result, there are separate service agreements: I can lie, but, in my opinion, the bank now has either a separate service agreement with an integrator (certainly more expensive, outside the supply and warranty agreement), or a separate service agreement with the manufacturer itself (also much more expensive). And yes, I know the case when another company, known for its databases for banks, simply refused to help quickly, because it could not.
Another problem surfaced there - ineffective specification. Due to this, it would seem that the client wins something as a percentage of the discount. But in fact, he loses in money, because he overpays for unnecessary racks. Naturally, it is profitable for the iron producer to sell more, and therefore they close any task with new servers. The business of large manufacturers is focused on the sale of technological solutions with a full range of related products. The manufacturer sells, but does not evaluate the solution, its pros and cons. Therefore, if he offers, he offers only his own, sincerely believing that his own is the best. The client, however, cannot always understand why he is buying from this particular manufacturer, and what alternatives were there at all.
With such cooperation, the bank cannot go and start any negotiations with other suppliers under the terms of the agreement. An often impossible task is to sign a direct contract with the manufacturer as a foreign company. These are all the risks of American regulation that fall on a state bank or on a company with state participation. Having a direct relationship with western joint-stock companies, the bank runs the risk of being without support, iron and pants under sanctions.
And by the way, the last and most fun. With a direct contract, the manufacturer likes to come and control how his equipment works. An American counterpart arrives, goes to the server room and checks the combat database: signing papers on FZ-152 can take a very, very long time.
It’s normal practice to fix the delivery price before the delivery starts in rubles. Only this way none of the major manufacturers do). Another normal practice is a clear SLA, when there is no throwing the ball like “iron is in order, check the OS”. The service comes from the one who drove and installed everything, all responsibility at one company, prices - not as for an additional service of the manufacturer’s premium client. Complicated passing of internal IT audits. Sanctions Contracts. The inability to tie deliveries to deadlines (or it's incredibly expensive. And all this for the sake of about 18% savings. It was a great idea.
One friend said that the manufacturer refused to support the Storwize V7000. The reason is that when upgrading, licenses were purchased incorrectly. The funny thing is that all the specifications were agreed and checked with the participation of the vendor. Then they sorted it out, forced to buy it (but apologized and gave a discount), but while they found out, the work could get up.
Another friend from the support of one airport said that the manufacturer on purchases is the only option, and this does not really contribute to the right prices and specifications. When you try to bargain and put pressure on it, it falls in price, but then it starts to put a pig in support and demand the most severe implementation of all regulations. And this also does not contribute to normal operation.
In short, I sit and look at this letter, which was sent to me by one of the customers, and asks if it is really possible to sign up directly with the manufacturer? And here I am laughing, then grabbing his head.
They may have it, but I have a little boiling, sorry. I tried to collect examples on the last occasions when something went wrong. Naturally, there will be no proofs, and further and further - no more than rumors.
To get started, let's take an excellent bunch of the striped operator and company, where the quality of the supplied iron is indicated directly in the name. Previously, the delivery was through Russian intermediaries, integrators, then they signed directly, eliminated the "extra link". Next is the clearest example of cost savings. The manufacturer cannot agree on a ruble contract to the Russian customer. The contract is foreign exchange, which means all currency risks, all costs for the operator. What happened to the dollar, you know.
As a result, neither a cheapening of the contract nor acceleration of deliveries was obtained, and no flexibility either. It is also important for the manufacturer to ship when he himself needs it. They have their own quarters, their reporting periods. And the customer needs it when the customer needs it. And these events may not coincide. Typically, the difference between these events is 6–9 months.
And that's not it.
If you start to hedge the ruble value, you need another third company to avoid currency risks. Plus, logistics directly without a rebuilt scheme is also far from the strongest side of direct contracts. Continuation of the direct procurement policy - the same operator entered into a contract with another company, let's call it “Moststroy Francisco”, and as a result, the service cost them such space money that the company was forced to refuse it. And everything was started just for the sake of this service.
One large bank, which is widely known for its queues, also threw intermediaries out of the process. But this time it was already concluded with another company - a server manufacturer, conditionally, “Three letters”. They decided to remove the intermediate link, instead received an increase in the value of the contract by 18-20%. The problem was that this manufacturer was very strictly spelled out what he was doing under the contract and what kind of extra money. And how fast it works. In addition, the manufacturer does not meet in any detail, because he does not have the opportunity to keep a warehouse, there is no way to do something faster than prescribed in the contract. The risks are high.
The bank has lost the level of service and SLA that it wanted. The manufacturer’s SLA is such that it is often impossible for a customer to put it into practice. As a result, there are separate service agreements: I can lie, but, in my opinion, the bank now has either a separate service agreement with an integrator (certainly more expensive, outside the supply and warranty agreement), or a separate service agreement with the manufacturer itself (also much more expensive). And yes, I know the case when another company, known for its databases for banks, simply refused to help quickly, because it could not.
Another problem surfaced there - ineffective specification. Due to this, it would seem that the client wins something as a percentage of the discount. But in fact, he loses in money, because he overpays for unnecessary racks. Naturally, it is profitable for the iron producer to sell more, and therefore they close any task with new servers. The business of large manufacturers is focused on the sale of technological solutions with a full range of related products. The manufacturer sells, but does not evaluate the solution, its pros and cons. Therefore, if he offers, he offers only his own, sincerely believing that his own is the best. The client, however, cannot always understand why he is buying from this particular manufacturer, and what alternatives were there at all.
With such cooperation, the bank cannot go and start any negotiations with other suppliers under the terms of the agreement. An often impossible task is to sign a direct contract with the manufacturer as a foreign company. These are all the risks of American regulation that fall on a state bank or on a company with state participation. Having a direct relationship with western joint-stock companies, the bank runs the risk of being without support, iron and pants under sanctions.
And by the way, the last and most fun. With a direct contract, the manufacturer likes to come and control how his equipment works. An American counterpart arrives, goes to the server room and checks the combat database: signing papers on FZ-152 can take a very, very long time.
It’s normal practice to fix the delivery price before the delivery starts in rubles. Only this way none of the major manufacturers do). Another normal practice is a clear SLA, when there is no throwing the ball like “iron is in order, check the OS”. The service comes from the one who drove and installed everything, all responsibility at one company, prices - not as for an additional service of the manufacturer’s premium client. Complicated passing of internal IT audits. Sanctions Contracts. The inability to tie deliveries to deadlines (or it's incredibly expensive. And all this for the sake of about 18% savings. It was a great idea.
One friend said that the manufacturer refused to support the Storwize V7000. The reason is that when upgrading, licenses were purchased incorrectly. The funny thing is that all the specifications were agreed and checked with the participation of the vendor. Then they sorted it out, forced to buy it (but apologized and gave a discount), but while they found out, the work could get up.
Another friend from the support of one airport said that the manufacturer on purchases is the only option, and this does not really contribute to the right prices and specifications. When you try to bargain and put pressure on it, it falls in price, but then it starts to put a pig in support and demand the most severe implementation of all regulations. And this also does not contribute to normal operation.
In short, I sit and look at this letter, which was sent to me by one of the customers, and asks if it is really possible to sign up directly with the manufacturer? And here I am laughing, then grabbing his head.