What is a top barrier to fruitful server refresh cycle negotiations?

Server refresh cycle deal-making best practices

At each of these stages -- net new purchase, optimum performance, end of the OEM warranty, device becomes legacy and end of life -- server vendors have ingrained sales tactics involving bundling, rushing purchases and pushing early upgrades that they use to get customers to buy more than they need, often for more than they should be paying. That's where the buyer's playbook (a kind of checklist or cheat sheet) and forecast enters the picture.

The buyer's playbook includes three areas of focus -- transparency, demand modeling and configurations -- that correspond directly to and counter the bundling, rushed purchases and early upgrade sales strategies of server suppliers. Forecasting supports all of this through three pillars: quarterly breakdowns; server refresh, upgrades and maintenance details; and the tracking of the previous discounts the server vendor offered.

Considering how important forecasting is to successful server hardware and maintenance refresh and renewals, what is the chief barrier to entering server deal negotiations with a solid 12- to 18-month forecast in hand?

Forecasting alignment key for server refresh cycle negotiations

According to ClearEdge's Milevsky, "alignment [is] easily the No. 1 barrier." That's because an organization will often have multiple forecasts circulating -- none of which are comprehensive. "Your procurement might have a forecast. Your tech team might have a forecast. The business might have a forecast. They all look [at the situation] differently because people have different motivations," he said.

The tech team has its own motivations when creating forecasts, Milevsky added, for example. So, it might not factor in discounts -- at least, not at first -- because what they really care most about are technical requirements. "So, getting those pieces aligned to build a forecast that contains all those three things, those best practices that I laid out [quarterly breakdowns, server refresh, upgrades and maintenance details, and precedent discounts] is the real challenge for companies," he explained.

Appointing a deal leader who manages the deal-making team and all the moving parts of the negotiation process is important here, he added. The leader would do that by, in part, consolidating the disparate forecasts from throughout the different departments in the organization into a single authoritative forecast.

"That deal leader can come from any different department, whether it's a businessperson, an IT person, or procurement, sourcing -- whatever it is -- finance," for instance, Milevsky noted. "As long as it's someone who is going to consolidate that data and, kind of, be the leader on the team here and get that alignment."

"That's where we see things go well," he concluded.

About ClearEdge Partners
Founded by senior sales executives from large IT suppliers and informed by current market analytics, ClearEdge enables CIOs and their teams to make more competitive IT investments. By combining rigorous inspection and IT financial expertise, they identify risk and opportunity, align internal teams, and maintain leverage throughout the lifecycle of supplier relationships. As a result, their clients maximize the value of their investments by unlocking millions of dollars from legacy spending and redirecting funds toward IT modernization, digital and cloud transformation with confidence and speed.