Prepping for Your Next IBM Contract

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

IBM takes a lot of heat. Their diverse offerings and growth-by-acquisition business strategy means they have a staggering amount of competition in the marketplace. It also means they know when to be aggressive. Here are a few things to consider as you purchase or renew your IBM solutions:

Know your IT roadmap. IBM is renowned for giving big discounts once privy to a company's future IT needs. If they know you will be in the market for managed services, hardware or software in the future, they're more apt to give you a discount now to secure that business down the road. Enter negotiations with a solid understanding of the opportunities for IBM to be engaged over the next three years.

Bring in competition. In NPI's experience, there are two areas where IBM exhibits the most pricing flexibility: support and hardware. In both of these areas, savings are best achieved when competitors are brought to the table. Even if you intend to stick with IBM as your incumbent, seek out competitive bids. It will give you greater leverage with IBM and demonstrate your commitment to securing fair market pricing.

Understand IBM's hot buttons. IBM will go to great lengths to unseat an incumbent for their mainframe and server/storage offerings. If you're considering one of these purchases in 2012, use this to your advantage to secure significant discounts on additional purchases.

-- Jeff Muscarella, EVP of IT, NPI

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