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Take back the power from resellers

When I talk to users, the subject of how they bought their storage gear always comes up. I've found that many IT departments -- particularly at small- to medium-sized businesses (SMBs) – often pay too much for storage because they don't have the time, experience or negotiating skills to get the best deal from their resellers.

Recently, a small company I talked to implemented a new SAN using EMC products. When I asked why he chose EMC, the IT manager replied, "because our reseller said EMC was the best fit for us." I came out of the interview feeling that the reseller had ulterior motives for pushing EMC and that this guy had been hoodwinked into buying expensive products.

But when I talked to more SMBs, I kept hearing the same story. Most buy what their resellers tell them to buy.

IT guys are not trained negotiators. Their job is to implement and operate technologies, not cut deals. Resellers know this and will push storage equipment on users that exceeds their needs and budgets.

And think again if you believe that resellers are objective. Even when they resell equipment from five different vendors, they will lean toward selling say, EMC or IBM products because they get the best leads or the best commission from the big vendors.

I talked to a friend recently who has worked in sales at two major storage vendors as well as at a reseller. He laid out for me what smaller companies should do at the negotiating table, but often never do in his experience.

  • Demand a longer maintenance term at the same price. If the deal is for a year of maintenance, ask for two years.
  • Ask for deferred payments. Tell the reseller that you don't want to pay now -- you'd rather start paying in six months.
  • Demand that the sales rep from the reseller bring a systems engineer with him to the negotiation. And then become friends with the engineer. His reputation is on the line and he will help you.
  • Ask the reseller which storage vendor's products they sell, and what percentage of their installs are from which vendor. This is a quick way to see which vendor is buttering their bread.
  • Create competition by bringing in another reseller. Smaller companies usually don't have the time to do this, but nothing scares a vendor more than losing out to a rival.
  • Don't be afraid to ask the chief financial officer to help you negotiate.
  • If the reseller sells gear from a bunch of different vendors, pick three that interest you and say you'd like to do a bake-off. They will probably say no and recommend one vendor. This is another quick way to see which vendor they are pushing.
  • Not that resellers don't have the customer's best interest in mind. Productive and healthy relationships between resellers and customers are common. But IT departments should do all they can to become better negotiators and keep resellers on the level.

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