A subject touched on with the LNXI discussions

I had talked briefly about terms and conditions of bids. We strive in the day job, to make sure ours are, shocking as it may be, reasonable. That is, they are not onerous, we don’t put thumbscrews to our customers, we simply ask them to pay on time or pay late fees, and agree to specific things that prevent misunderstandings in the future. We have it in our heads that somehow angering customers is a Bad Thing&tm; This said, you should see some of the RFP T&C; we are asked to agree to.

I won’t name names to protect the guilty. Most of the onerous ones come from two specific submarket verticals. One recent one demanded full 24x7 support of a tiny linux cluster for first year, and free support of the same type for the life of the system. Another recent one demanded the right to terminate a large purchase in the middle if they chose at no risk to them. Imagine this … we order 1+M$ of equipment, and they want to terminate it 1/4 way in. This isn’t gear that is easy to resell, tends to be quite specific to end user need. Yet this is a requirement. What we do is generally tell the people, politely, “no bid”. If they ask why, we will point out the huge risks that they wish us to undertake on their behalf, with no payment for those risks. If you want to know what drove LNXI out of business, this was basically it. They accepted the risks. And the risks eventually killed them. We won’t accept them. We will be reasonable, we will negotiate with end users willing to talk and make their terms reasonable, but will not accept one sided onerous risk without a significant reward for doing so. And in both these vertical sub markets, such rewards are very hard to negotiate. Its well past time for vendors as a whole to reign in onerous terms and conditions. They were useful in the past with huge corporations bullying smaller customers, but when you are a small vendor with real value, and you are being asked to pay the costs effectively for others misbehavior in the past … well … no. Some business is best left on the table. The onerous ones. The ones that sunk LNXI. Sadly the HPC market (the non-commercial market) has quite a bit of this.