RE: Calling all NANOG'ers - idea for national hardware price quote registry

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1

From: owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] On
Behalf Of Sean Figgins

Most of the vendors I know of like to wine and dine the VPs.
If a NDA gets violated, the vendor will not be forced to stop
dealing with the company, just get the employee that violated
the NDA to be fired.
Companies are getting very, very picky about this kind of
information getting out. And, if your company is publically
traded, I am sure that some consultant will claim this is a
violation of Sarbanes-Oxley.

I can see your points here. But, I think there still is value to the
medium and small companies that are not bound by these types of
agreements.

> > 6) Such a list is likely actually cause companies to have
to pay more.
>
> Not sure about the logic here...

Logic goes like this: Company is seeing that it's prices are
getting out.
Company stopps giving the good discounts to anyone, as they
will have to give them to everyone otherwise...

Not sure I buy that line of reasoning. Hasn't happened in the myriad of
other consumer product lines that have open pricing. In fact, just the
opposite happens. Open pricing drives pricing down - not up. This is
exactly the type of culture these hardware companies want. When you
have closed pricing - in any industry - the buyer is always at the
disadvantage. It's time to open this up.

If you are already doing business with a company, and just
want to have some incremental additional devices or services,
then you probably don't have to talk to a sales guy much to
get a quote from him.

If you are shopping for the best price, and don't care about
support costs, or technical specs, then go shop at CDW, or
dell.com. Their prices are published.

Actually, not the case. CDW and Dell (and all the others) only publish
their prices for the low end gear that they sell. Anything else
requires a call to a rep and establishing a relationship.

  Matt

2

I can see your points here. But, I think there still is value to the
medium and small companies that are not bound by these types of
agreements.

If they wanted their pricing published, they would do so themselves. Most
vendors go to extreme lengths to make certain that not even the list price
of the high-end gear gets out, let alone examples of discounted price.
Most companies do want an NDA signed, and even those who are lazy/slack
about it for smaller customers would quickly crack down on anyone
contributing to such a list.

Why do they do this? Well, for starters they want to make certain you have
to interact with a sales person. Yes we've all had to deal with companies
who's sales people are difficult or impossible to get ahold of (some days
this seems to be a common theme of this industry :P). Yes we've all ended
up stuck with sales people ("order takers" really) who are incompetent,
don't have any product knowledge, and who take days or weeks to return a
simple quote. If you're an educated consumer who wants to compare multiple
options, it can be a nightmare. But, understand that you are the
exception, not the rule. Even in this very technical industry, most
consumers are idiots, with no idea what they want or need. A sales person
basically required in order for them to figure out their purchases, which
of course presents the opportunity to upsale.

Also, in regards to the extreme "list" vs "discount" pricing differences,
you may be wondering why vendors do this. It all leads back to the idiot
consumer. You'd be absolutely astounded at the number of government
agencies, universities, banks, etc, to whom money is not an object
(especially when people have a budget that they need to spend in order to
not have their funding reduced next year :P), who will buy things at list
price and not think anything of it. Even when someone gets a discount, the
vendor can tell them ANYTHING about how good that discount really is...
10%? 20%? 25%? 30%? 38%? 42%? 50%? 80%? These are just numbers, that can
easily be changed on a case by case basis. Remember the goal is to extract
the most amount of money from each customer, which means having highly
flexible prices depending on what each customer is able to spend.

Obviously no one is wasting their time sueing you if your company leaks
the price of a low-end router to one or two of your neighbors, it isn't
worth the price of the lawyers, and it isn't easy to prove. In cases of
larger companies with an employee who leaks the data, they simply apply
political pressure to have the employee fired. But if you were to start
publishing this data in any large scale, and especially if it even
impacted one of the cash-cow sales mentioned above, they would come down
on you like the hammer of the gods. :slight_smile:

Actually, not the case. CDW and Dell (and all the others) only publish
their prices for the low end gear that they sell. Anything else
requires a call to a rep and establishing a relationship.

Same concept really, they only list retail pricing for low-end products.
Anything bigger, and you need to talk to a rep who is trained in maximum
extraction.

3

This is not true, particularly with places like CDW or Insight, etc. I don't buy enough from Dell but I imagine it's the same.

There are usually three prices:
     1) The price on the website, if listed at all.
     2) The price on the website after logging in and getting your "special pricing" based on what company/login/who you know/etc.
     3) The price you get by calling your sales rep and demanding better/volume/blackmail pricing.

Anyways, this whole idea strikes me as a bad one for all the reasons others have mentioned but particularly because just knowing the price someone else has doesn't mean that you will get the price, in fact, you might find yourself on the receiving end of "have a nice day dealing with vendor Z" -- particularly if they already know you are set on using them as your vendor and you'll come back to them begging. It's a game of poker bluff all you want but then be comfortable walking away without making a deal.

-david

4

Not sure I buy that line of reasoning. Hasn't happened in the myriad of
other consumer product lines that have open pricing.

The key word here is "consumer product".

Actually, not the case. CDW and Dell (and all the others) only publish
their prices for the low end gear that they sell. Anything else
requires a call to a rep and establishing a relationship.

"low end". Quite the overlap with "consumer". It's pretty easy to find
the "best price" for a Linksys cablemodem. When the router price rivals
that of a Bugatti Veyron, getting a solid answer is a lot tougher - the converse
of "If you have to ask, you can't afford it" is "Whatever you can afford, is
what you'll end up paying". There's not enough margin on a $400 PC to be worth
a real salescritter's time. If it's a $20K server, it's worth a salescritter
to spend quite some time haggling. And if it's a $10M sale, the negotiations
and tap-dancing will go on for a *long* time....

(http://www.cnn.com/2005/AUTOS/funonwheels/09/16/bugatti_veyron/index.html
if anybody actually cares...)