latest thinking

Nowadays, large organisations see

much of whats considered to be
standard networking equipment
routers, switches, and rewalls
as commodities. Commodities
usually have three characteristics
in common: theyre standardised,
readily available, and cheap,
regardless of who supplies them.
At least, they ought to be.
So, in light of global pressure
to keep ICT budgets at while
accommodating rapid growth,
businesses are asking increasingly
searching questions about who they
get their equipment from, at what
total cost of ownership ... and why.
Gorillas on Your List
A Diversied OEM Environment
Can Lower Your Risk
Tough questions are changing
the landscape for large OEMs
According to Dimension Datas Baba
Nadimpalli, US Client Director, and Christine
MacKinnon, Global Managed Services
Vendor Manager, businesses want to know
why they should pay a premium for a
commodity. Are they staying with a particular
original equipment manufacturer (OEM)
simply because theyre familiar with its
products and their engineers are certied in
supporting them? And, by aligning with a
limited number of OEMs, are they perhaps
missing out on more innovative and cost-
effective technology that would suit their
evolving environment better?
Businesses are also wondering if its really
worthwhile to refresh devices as often as
stipulated by OEMs simply to stay with
premium products that are supported, adds
Nadimpalli. Maybe their so-called ageing
equipment is doing a perfectly good job
in spite of having no OEM to call on if it
breaks? What are the real risks of pushing
the end-of-life boundaries?
These questions are changing the game for
large OEMs the so-called gorillas of the
ICT market. Says Nadimpalli: Large OEMs are
beginning to realise that the trend among
the majority of clients is towards greater
diversication, not towards single-vendor
estates. Some OEMs even acknowledge
that a multi-vendor approach just makes
more sense for a client because it lowers
operational and commercial risk and helps to
future-proof the organisations environment.
However, some client organisations arent
quite ready yet to move boldly in that
direction ... and for good reason.
latest thinking | Gorillas on Your List A Diversied OEM Environment Can Lower Your Risk
Navigating the changing
landscape
Having too many vendors in your network
is just as risky as having one gorilla. It
becomes difcult to achieve scale and
management is complicated. You have no
leverage, limited ability to negotiate on
price, and added operational complexity.
Cheap to acquire is also not necessarily
cheap to operate. With a single gorilla
on your network, it might seem less
complicated, but it is a road fraught with
a different set of risks, such as being tied
to the vendors strategy. The ideal situation
is somewhere in the middle: a balanced
approach with a few carefully selected and
well-managed vendors.
Global expansion made easier
with multi-vendor approach
The changing vendor landscape was clearly
illustrated in the journey Nadimpalli saw
one of Dimension Datas long-term clients
take, over the last few years. As a large
and well-known software provider, this
organisation was itself deeply integrated
into the ICT market and maintained valued
mutual relationships with prominent
OEMs. As a result, the software providers
environment was as much as 80% single-
vendor focused a situation the business
began to see as both risky and expensive
to maintain.
The client then took the bold decision to
reverse the trend by putting out to tender
each and every piece of networking and
security equipment from software phones
to specialist routers. It wanted to better
understand whether the business was
paying the right price for this equipment;
whether it was paying for what it
needed, or more; and whether procuring
the technology at that price was really
maximising the benets for the business
itself, and not only for the OEMs that
provided it.
This new multi-vendor approach
proved particularly benecial when
the organisation embarked on a more
aggressive growth strategy a few years
later. Says Nadimpalli, From 2010
onwards, the organisation began acquiring
businesses at a rate of up to 12 acquisitions
per year. With these acquisitions came an
ever-broadening range of vendor brands.
The acquisitions also brought new
employees with a variety of certications.
Had the organisation enforced a rigid
one-vendor policy, it would have incurred
unnecessary costs, lost qualied employees,
and negated the exibility and expertise
brought into the organisation through
acquisition. Later, the organisation settled
on a range of OEMs that best aligned
with its strategy, and enforced the
implementation of these technologies as a
global standard. But before reaching that
point, the multi-vendor approach helped
ensure that it maximised the gains from its
rapid, global growth.
This new multi-
vendor approach
proved particularly
benecial when
the organisation
embarked on
a more aggressive
growth strategy
a few years later.
Says Nadimpalli,
From 2010 onwards,
the organisation
began acquiring
businesses at
a rate of up to
12 acquisitions
per year.
Financial benets above all else
Nadimpalli points out, however, that the
success of this approach greatly depended
on how the organisation was run. Our
client is managed with strict nancial goals
and business outcomes top of mind. In
such an environment, theres little tolerance
for decisions made either to maintain a
comfort zone, or out of loyalty. All decisions
had to make business and nancial sense.
In contrast, many organisations still operate
as though the equipment or devices they
procure are the most important aspect
that determines success theres a focus
on features and functions, rather than on
overall strategic intent.
MacKinnon points out that another
determinant of success with the multi-
vendor model is access to the right level
of skills and expertise to ensure that
all components of the disparate OEM
environment interoperate optimally. Here,
the organisation can choose to acquire,
retain, and develop in-house expertise
through training, or use the services of an
appropriately skilled systems integrator.
The in-house route is both more risky and
expensive. Its risky, because the business
can never be sure that the skills and
expertise it invests in today will be those it
would need most in the future. Technology
evolves rapidly and often unexpectedly.
This is one way in which a broader multi-
vendor approach can help future-proof
the environment. In-house upskilling is
also expensive, because specialist skills in
niche technologies are scarce and difcult
to retain. Outsourcing this risk and cost
to a service provider that can aggregate
support for a broader range of OEMs in
your environment is clearly a better way to
go nancially, operationally, and with the
future in mind.
latest thinking | Gorillas on Your List A Diversied OEM Environment Can Lower Your Risk
Training and certication:
a double-edged sword
Focusing on in-house skills development
can be a double-edged sword, adds
Nadimpalli. Keep in mind that the
certication process is key to the channel
strategies of OEMs. When todays largest
OEMs started out, the only way they
could grow their international footprint
rapidly was through providing training
and certication to integration partners,
as well as to engineers within large client
organisations. This created a natural
tendency within those organisations
to favour that particular OEM ...
even years later.
Those relationships are still strong today,
as those engineers have moved into
decision-making positions. In fact, some
client organisations get substantial OEM
discounts as well as high-level access to
experts and product knowledge within
the OEMs, even more readily than
integrator partners do. But certication and
preferential treatment also tie the bond
between the client organisation and the
OEM more tightly, which makes it
all the more difcult to adopt a
multi-vendor approach.
Smaller vendors also use training and
certication strategically, says MacKinnon.
Large OEMs simply cant lead in all areas.
So, while all OEMs use as much training
and certication as possible to ensure they
move more product, some smaller vendors
are beginning to realise the benets of
niche specialisation and focus more of
their training on interoperability. This
is particularly true in the security arena
where the risk of hedging your bets with
only one vendor is more pronounced.
This focus on tight specialisation and
maximum interoperability provides smaller
vendors with a foot in the door in large
multi-vendor environments, as well as a
chance to gain trust through partnering
with knowledgeable systems
integration partners.
Seeking a systems integrator
In this highly competitive and ever-
evolving landscape, its not easy to
be an organisation thats thinking
about diversifying. Organisations are
understandably nervous about moving
away from large OEMs with which
theyve forged close relationships,
says MacKinnon. They fear losing any
preferential treatment and weakening their
negotiating position with the OEM. Its also
impossible to transition the environment
all at once because you cant change your
entire infrastructure overnight you need
to do so component by component,
section by section.
Moving to a multi-vendor approach
requires a high level of decision-making
maturity in the organisation in order to
evaluate OEMs without bias and with a
focus on strategic benet, adds Nadimpalli.
The process must be formalised and well
managed, as everyone from the top
executives and throughout the business
needs to understand and align with
these decisions.
An ICT services provider with broad and
in-depth skills, and close relationships with
a range of leading OEMs, can be invaluable
in helping this process along, advises
MacKinnon. But its crucial to select the
right partner. Beware of multi-vendor ICT
services providers who still act as
extensions of the OEMs businesses and
approach each opportunity as an individual
vendor-led sale. Rather, your ICT services
provider should be an extension of your
business in nding the right OEM to suit
your environment.
Make sure youre not blindly following
the strategy of any one gorilla on your
list. The ideal partner should understand
your organisations business and adopt its
goals and ambitions as its own whether
its cost-reduction, efciency gains, or
aggressive growth and expansion. The
ambition of your partner should be to help
you evolve your technology environment
to best support your vision.
CS / DDMS-1458 / 01/14 Copyright Dimension Data 2014 For further information visit: www.dimensiondata.com
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