Take Investment Protection off Your List of Evaluation Criteria

Investment protection is hogwash in today's fast moving business and technology environment.

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Historically I have not been a big fan of Interop for a variety of reasons. However Greg Ferro, George Stefanick, Ivan Pepelnjak, and Harvard Business Review IT Director Ken Griffin — to name a few — changed the breakout sessions experience for me.

During Greg’s data centre network session, he said something that was priceless. He was giving some guidance around refresh cycles and told the audience to not worry about investment protection. It was so refreshing to hear it. I wasn’t the only one nodding my head: Investment protection is hogwash.

Greg made the case that moving to a 3-year replacement cycle changes a customer’s buying and design criteria. Right now, customers have to guess what is going to happen over an 8- to 10-year cycle; this long term guess creates the desire to protect that amount of spending with “investment protection” features.

By considering flexibility, growth, and scalability of the network over that period, customers lean towards chassis switches with ports, which can cost 5 to 10 times as much as a pair of 1RU switches with the same type of ports. By selecting chassis switches, Greg says customers have doubled or tripled their project cost.

However on a 3-year replacement cycle, customers can choose right-sized equipment (which is probably a 1RU switch), do less maintenance, and gain faster access to new features. In addition, the risk could be lower.  

For example if bad decision was made, a company is only stuck with selection for 3 years. Or, the company can choose to replace the network earlier and take smaller hit on capital expense line than if the company bought chassis switches.

While Greg used the logic of innovation and refresh cycles to make his point, I want to add another reason why I feel investment protection is all jibberish. I’m not saying don’t build a solid network to meet your company’s expectations.

I’m saying don’t buy into product based on a vendor claiming the product will provide a bunch of fantastic features down the line or the product is designed with such flexibility it will be able to mould to your future needs. That is just plain nonsense.

Vendors are there to make a buck and will say anything to make the sale. There is nothing wrong with making a buck. It is business and a free market. On the same note, vendors aren’t bad and intentionally lying. In general, vendors really believe the company is building a product for the long term and have plans for improving the product to stay ahead of the competition. However, infrastructure and operations professionals should review the products based on the current product’s capabilities to support their future demands.

Don’t take into account phantom features, functionality, or products that are theoretically coming out down the line. This is vapourware. Vapourware is worthless!

Why? Because more than likely, the feature won’t show up. Probability is against you. I know. I was on the vendor side and was part of a team deciding which of the 50 to 100 features we would implement. The reality is that less than 10% ever make it into the product or solution before it goes end of life.

As an old product manager, I still carry the guilt of not delivering on the investment protection features I said were coming down the road. I had high hopes but didn’t take into account the following decision points: time to innovate the feature or function; revenue the new feature would theoretically bring in versus another feature; and engineering resource availability balanced against bug fixes or other new products and/or tied to closing a big deal.

I’m sure some of you might not agree with me or vendors might to try to convince you otherwise. Whatever the case is, you should cover your butt if you choose a solution based on (some) promises. I guarantee the vendor (or salesperson) won’t be in the meeting when you get called to the carpet when the feature doesn’t arrive on time, or at all. If everyone is so sure in the investment protection, then have the vendor put it in writing.

Why? Because then they are liable to deliver it. Second, you test their commitment to treat you and your company as a strategic business partner. Until the commitment is written down, future features should be weighed as a zero in deciding which solutions will meet your needs.

Posted by Andre Kindness

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