Saturday, August 19, 2006

IT Procurement 2.0

I posted a little while back about Zenni Optical, which sells eyeglasses starting at about $16/pair complete. The other day I was looking at a pile of generic ink cartridges I've gotten from, at a cost of about $1-2 each (the name brand versions can run anywhere from $10-$30 each in stores). We test a lot of phones at Skip, and sometimes we need extra chargers. I have a bunch of USB-type AC chargers (e.g. for Moto RAZR or Blackberry) -- $6 each at Price for "official" equipment at other sites? $25-$30 each. And miscellaneous hardware that we use for desktops, laptops, etc. in the office has come from a whole host of great vendors that all have two things in common:
  1. The vendors offered the best or near best (within 20%) price for a generic product on pricewatch, or they were matching that price range
  2. If they advertised on pricewatch, then they had 4+ stars from their reviews
Once upon a time, Dell disrupted all of the PC builders. They were so successful at addressing every market segment (home, small biz, enterprise) that even startups would get their equipment through a big ol' Dell account. And it was a reasonable choice.

That era is over, for startups anyway. With the half-life of technology running as short as ever, there is no justification to pay extra for a supportable or supported configuration. (Mind you, production servers are a bit of a different story, but like many startups, Skip only has a few of those and they don't change much.) If a laptop breaks in 2 years, the user would probably need a better performing one anyway, and Dell doesn't look like they're too eager to support their own gear regardless.

And memory modules, monitors, hard drives, everything else? Bring on pricewatch! I haven't been burned yet, and more importantly I do not believe that any "established vendor" is going to do better by my small startup at any affordable price. I've seen enterprise vendors' support when I worked at a major bank; we had a virtually unlimited support budget for one vendor and yet no amount of green could make them show up, get things working, and keep them working.

So I've realized that IT Procurement 2.0 is about TigerDirect and Fry's and a myriad other vendors that are selling white-label gadgets or last-quarter's products for pennies, and are getting my dollars. Just as success put the lie to a priori dismissals of the LAMP stack, Ruby, and the cluetrain, a thousand startups today are controlling their burn by buying "great cheap stuff that works" from great vendors that want to sell it to them.

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