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Manufacturers Going Out of Business Can Hurt IT Departments

As an “IT Person,” you enjoy focusing on the technology. Testing out, evaluating, and setting up new platforms, features, and devices. It’s probably what drew you into the work of IT. What probably didn’t cross your mind was how a single manufacturer going out of business could affect your daily work and your job.

A Technology Lifecycle

When a company adopts a new technology and platform, there is a basic lifecycle. You install it; the company employees utilize it; you maintain, update, and patch it; and then – after (hopefully) many, many years – you look to replace it, possibly with a new version. During this product lifecycle, there is a heavy reliance on the manufacturer. The maintenance requires bugs to be fixed, patches to be updated, troubleshooting, and probably new features to be installed. That means that you are tied to that manufacturer for the foreseeable future, because they assist you in keeping that specific technology working in your environment.

Technology Doesn’t Last Forever

So, what happens if that manufacturer fades away or goes bankrupt?  If that happens, you will find yourself scrambling for ongoing maintenance and support. It will now become IT’s job to fix it. Do you have the bandwidth and training to continue with this technology in-house? Do you have the money and time to find a replacement? The truth is, if you have not planned for this type of disruption, you may be blindsided and left stuck with no support for those multi-year technology investments.

Want some examples? Nortel Networks went bankrupt and then was sold off in pieces to other companies. 3Com’s downward spiral ended in an acquisition by HP (which later acquired another networking company, Aruba). Names like Foundry and Ruckus will fade away since being acquired by Brocade. This happens to telecom providers as well, like GTE or, most recently, Windstream. With companies getting acquired and claiming bankruptcy, it can cause concern about the long-term support of specific products that you are utilizing. That is enough to keep anyone up at night.

Let me just highlight one thing: not all acquisitions are a bad thing. A lot may actually work out for the better. Take Meraki’s acquisition by Cisco, for example. This has been great for all parties. The Meraki product line has continued to be supported and developed. It has also given the consumers better access and integration with traditional Cisco products. So, don’t be scared of mergers, but be smart about them.

How You Can Stay Ahead of Change

There are some smart choices IT departments can make to stay ahead of these changes. Here are my top three tips:

  1. Know your price.
    I hate to use cliché, but this one fits: “You get what you pay for.” You want to look for a reasonable cost, but just know that if something is priced far below the competition, there may be a reason for it, and you may end up paying more in the end.
  2. Evaluate your options.
    Price is important, but you also need to do your research on the manufacturer or provider. Look into their services and their customer ratings. These can be good indications of how they will help to support you during the lifecycle of the product.
  3. Be mindful of long-term agreements.
    Contracts and agreements are not something you can avoid, but make sure you look into them carefully, especially the long-term ones. You want to make sure you’re covered should that agreement end sooner than expected.

The Wrap Up

The fact is, no one wants to get a letter in the mail notifying them that their service is being cancelled. But if you do, be prepared. Make sure you are ahead of the issue and you know your options. Enjoy all the great parts of working in IT, but also know the business side of things and know how it affects your company, now and in the future.