December 16, 1996

Corner Office
Can your vendor pass a physical?
By Paul C. Tinnirello


Paul Tinnirello

If your technical astuteness is what propelled you to your company's top ranks, the point I am about to make might bother you.

The fact is, technical considerations are often far from the top of the list of your concerns when selecting a strategic vendor. Most important, in my view, is financial health and staying power. You can pick the best technology in the world, but if the product is discontinued or support was eliminated a couple of years later, you will lose all credibility in your company, and your staff's morale will plummet. And that is much worse than picking the second-best technology to begin with.

As an example of technical capability vs. market momentum, let's look at Novell's NetWare vs. Microsoft's Windows NT Server. Although some may argue that NetWare is still the predominant network operating system, it is clear that Windows NT has the attention of many IS professionals.

Why am I looking at NT? For starters, I'm covering my bases. Novell's strength has been in the technical muscle of NetWare. It captured resellers and spawned huge interest in new, specialized jobs, such as CNE. Choosing NetWare was pretty safe.

But Novell wasn't thinking much about its primary objective as it acquired companies and then sold them off.

Now, the question is whether Novell will survive strong enough to integrate its products into the next wave of new technology. I'm hoping that Novell can keep on growing because it is important to have alternatives in each segment of the industry as opposed to one large player.

But the fear of using a stricken vendor's product as a long-term corporate strategy has many CIOs ready to abandon NetWare.

Here are some suggestions for choosing a vendor as a long-term strategic partner:

First, don't make decisions purely on technical merit, even if your tech staff thinks something is the best thing since sliced bread. Some of the strongest technical products on the market are ready to push up daisies.

Second, check out the vendor's business plans. Is the vendor concentrating on core business or diversifying excessively? Also find out how much revenue the vendor returns into R&D.;

Third, watch movement in market share and marketing strength. Sometimes a vendor may have market share but may not be able to sustain growth due to poor marketing tactics.

Fourth, when possible, consider multiple vendors for a project. This can minimize the danger of being abandoned.

Finally, expect the marketplace to keep shifting. Technology vendors have no magic touch. While they can often deliver great products, they can make bad business decisions that will affect your environment. Just remember IBM and OS/2, and that Microsoft almost missed out on the Internet.

Paul C. Tinnirello is a CIO in the insurance financial industry. He can be reached at

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