Vendor consolidations happen all the time across all business sectors, for a variety of reasons. Sometimes it is to eliminate the competition. Other times it is to expand into new markets. Still other times it is to acquire new technology—generally, it is far less expensive and time-consuming for a company to acquire technology than to develop it on its own.
Regardless of how it comes about, vendor consolidations are troubling for public safety agencies. When they occur, the surviving company immediately looks for redundancies with the idea of eliminating them. They may discontinue competing products. They may cut staff because the consolidation has resulted in a personnel glut. Conversely, the acquired staff may begin to flee, especially if they were working on a product that is being discontinued.
All of this is very problematic for public safety agencies. Here are some of the scenarios we’ve witnessed in the market:
Product Phase Outs During Vendor Consolidations
When a product has been eliminated, the vendor often scales back and then eliminates the support it provides. If the engineers working on the eliminated product leave, it may take weeks for an agency to get answers to their questions, because there are less engineers available to field those questions.
Worst of all, the agency is often stuck with a product that, at best, will tread water for a few years—no advancements will be forthcoming. Eventually, the agency will be forced to endure a migration to a new product, incurring significant hardware/software-acquisition and training costs. This adds much angst to what already is a stressful environment.
Vendor Consolidation During A Procurement
Vendor consolidations that occur during a procurement are especially egregious for the agency. We have a client that signed a contract to procure a new system on a Thursday, and then was told the next Monday that, due to a consolidation, that the product the agency had just purchased was going to be discontinued. While the vendor pledged to continue maintenance support of the product for a five-year period, there was no way that the product would evolve through software upgrades. Given the 15- to 20-year lifecycle of the product, this was going to give the agency a lot of heartburn.
Upon learning of this, we recommended that the client request a free upgrade to the surviving product, which was going to advance through software refreshes. The agency still was going to incur hardware and training expenses, but at least they were able to save some money on a migration that was inevitable.
Be Proactive About Planning for Vendor Consolidations
There is no way that any public safety agency can prevent a vendor consolidation; in fact, agencies won’t even see them coming. Renegotiation is one avenue that can be pursued, but that approach is reactive, and the agency won’t be dealing from a position of strength. A better path is to anticipate that a consolidation might occur during the product’s lifecycle—a reasonably safe bet—and negotiate language into the original procurement contract that commits the vendor to certain financial considerations if such an event occurs.
Navigating the vendor-consolidation morass isn’t in a public safety agency’s wheelhouse. It is in ours. Here at MCP, we are well-versed on the vendor community that serves the public safety ecosystem. We know who to call, and we have a great deal of negotiating prowess. If you ever find yourself in this situation, please reach out. We are uniquely qualified to develop a strategy that will deliver the best possible outcome.