IT chiefs split over dual vendor strategy

A slim majority of IT directors favour dealing with two technology suppliers rather than a preferred single supplier, according to new research from Vanson Bourne.

The survey of 100 UK IT chiefs, commissioned by Hitachi Data Systems (HDS), found that the 51 per cent who adhere to a dual vendor strategy do so because they believe it keeps prices competitive (83 per cent), avoids lock-in to one supplier's proprietary features and functions (83 per cent), encourages vendors to innovate and develop the offerings (75 per cent), and keeps service levels high (72 per cent).

Mark Ellery, head of business development at HDS, said: "From an enterprise point of view it's about maintaining competition, making sure you're continuously driving down prices. It's also you are driving that competitive edge from a technology point of view."

However, not everyone believes this works in practice.

Frank Coyle, IT director at John Menzies Distribution, told silicon.com that experience told a different story.

He said: "Some years ago I ran a dual supplier situation with NCR and Data General for Unix servers. While there were advantages, I do not believe that there were significant price reductions because of it.

"The downside was always having to remain technically up to scratch with two, sometimes quite different architectures. Despite Unix being an open standard, in practice there were certain developments that had to be changed in order to accommodate these differences."

Coyle said he eventually standardised on Sun servers and although he is happy to consider options from other vendors, he believes his current supplier will usually give the best deal. "I know this is boring but, well, that's business."

Richard Sykes, chairman of sourcing consultancy Morgan Chambers and former IT director at ICI, said this focus on dual vendor strategies was missing the point.

He said: "This sounds as if it was answered by 'techie' IT directors who are thinking: 'I'm buying technology and I want to get the best deal possible.' Meanwhile, FTSE 100 companies are increasingly going for the single structure deals because it gives them more influence and as a result they get better performance."

Sykes said building a strong relationship requires a supplier to have a deep level of understanding of your business, "top to toe" communication and a joint commitment. You are unlikely to get that with two technology vendors, he said.

However, Ellery at HDS defended the dual vendor strategy, insisting it was the surest way of ensuring you keep at the forefront of technology.

"As long as the market works within standards, the dual vendor approach is perfectly reasonable. And with technology, leadership tends to leap frog," he said.