How well is your performance software supplier performing themselves? When a supplier says they 'won't lose the business on price' it means they are keen, possibly too keen, to retain your business. If this supplier has taken pride in being the market leader and therefore never the cheapest in the past, perhaps the alarm bells should begin to ring.

You provide a service to your users. If the performance of the hardware you support is unsatisfactory over a number of years they will become unhappy with you. When they get the chance, they might consider using an alternative: outsourcing, third party operational support or an ASP perhaps. The same situation can arise with you and your performance software supplier. You might not have had a good quality of service over the years and this might mean you have not exploited the software fully.

Now imagine you go back to your users and say that you guarantee that if they renew, you will be cheaper than the alternatives. If money is their only criterion then you have said the right thing. However, they are unhappy because of the service, not the price. Being cheapest does not address their problem: they are not getting sufficient value for their money.

The same is true of your performance software supplier. Will things be better just because they are now cheaper? Of course not, as the software is exactly the same. You will probably still not get enough value from their software to justify even the cheaper price. To make matters worse in the current climate, many US software suppliers have cut their workforce by 10% or more in the last few months. They therefore have fewer staff to address your real need: on-going support and development of the software. Even worse, redundancies usually mean that the better staff chose to leave meaning the redundancies are just the tip of the iceberg.

Price is always an important factor in selecting a supplier. Redundancies and poor corporate results however can mean that suppliers are desperate to get your business signed up for another few years, without them having the intention or the means to ensure you get acceptable value for the money you spend with them. Much better to look for a supplier that is stable in turbulent times and offers references for its quality of service, especially when buying software intended to enhance service quality.