Yet despite this being the case for the public sector, it has often been touted as Mecca for the channel. It is always referred to as ‘lucrative’, and firms that do business with it seem almost to revere it.
However, the reality is very different. The hulking and arrogant beast that is the UK public sector has driven channel players to despair, cost firms billions in fees and fines, and driven other suppliers to rack and ruin (iSoft is just the latest in a long line).
This week, the Office of Government Commerce (OGC) announced, with its usual air of free abandon, that the entire public sector will now be eligible to receive up to a 45 per cent discount on IT hardware, thanks to the OGC’s uncompromising negotiation skills.
While as a taxpayer this is great news, as a channel player it is
devastating. Is it still even possible to get 45 per cent discount on hardware?
The only result from this type of discounting is that the ‘lucky’ pre-selected
17 hardware suppliers will be reduced to selling at cost – or under – in a
desperate attempt to win a deal.
Then there will be a frantic and more than likely hopeless scramble to ‘add value’ to any hardware deal in a pitiful attempt to secure at least single-digit margin. If this was being offered by any firm in the private sector, most VARs would never even consider it.
Channel players will be stretched so thin that the service they offer will be forced to suffer. Funds and resources assigned to any hardware project will be minimal, to say the least. Mistakes will be made and corners will be cut.
Therefore, any project will be hampered and put at risk because the public sector cannot resist a bargain. The sooner the OGC realises the truth behind the old adage ‘You get what you pay for,’ the sooner it is likely to see a higher success rate for its IT projects.
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