The retailer deals in luxury goods

Although the retailer deals in luxury goods and permanently is not a high-volume business, it had grown from in broad outline $10 million in sales when it signed on with the SaaS provider to about $50 million when the outage occurred, leaving the IT manager to surmise that the vendor's platform couldn't scale as advertised to handle that growth.

Relationships between innovation vendors and their clients often start out sweet and turn sour, thanks to unmet expectations, half-truths, or products and services that simply don't work as advertised.

While it's hardly unusual to have strained buyer-seller relationships in any industry, dealings with research vendors can be particularly thorny because of the complexity of the products -- you simply can't tell without an in-depth evaluation whether a complicated ERP package or networking equipment will meet your organization's needs.

The vendor's technical staff while the buying process

* Talk to the vendor's technical staff while the buying process. Ask about features, performance and product road maps, particularly anything that will be important to your business in the straightway 12 months.

* Find out which firms are providing hardware, software or services to your vendor. Ask what happens if those secondary vendors go out of business or end their relationship with your vendor.

The president "would tell a small business of like as not five users that didn't have particularly critical data that they needed a firewall. At the time he would take an old computer that had been discarded and was ready for recycling, load it up with firewall software and sell it to the small business for $500," recalls Peacock.

"This firewall would require tending to once a month or so, which would generate an hour or two in service calls; even if the call was 15 minutes, he charged $100 for the hour." Since most of the people the company sold to didn't have technical expertise, it was hard for them to argue with the president, because they needed his company's support to keep the product running, says Peacock, who is currently looking for work.

Technology companies have long seen the value in selling directly to the line-of-business managers, says Paradis, now an executive coach at CPI/New Options Group in Sparks, Md.

The late '90s at Deutsche Bank Alex

In heading up remediation programs for Y2K compliance in the late '90s at Deutsche Bank Alex. Brown, Paradis discovered that different business units had purchased and installed software without the IT department's knowledge or approval -- and now it wasn't Y2K-compliant, he recalls.

In another job, as database administrator for a large financial services company, Paradis at one point found himself having to support six different database packages to suit the needs of various systems purchased by line-of-business managers.

"Salespeople are very good at convincing business line people," he says. "They sing and dance, and the then thing you know, the business line has a product it can't support."

To combat that disconnect, Paradis suggests that both line-of-business managers and IT be involved in the evaluation and purchase of new systems, with IT taking the lead to ensure that the product will live up to its claims technically and integrate with existing research.

What's more, the outsourcer's proposed new contract -- which included technology just as VoIP (Voice over Internet Protocol) to lower costs for the county -- ended up including fewer actual services for near double the money.

Prosser recalls, "They weren't coming to the table with innovative things; they weren't excited about the research. They were jaded and cocky; they thought they had the contract in the bag."

In this era of cloud computing, it can be tricky for IT buyers to figure out who they're actually purchasing services from, and in short who is ultimately responsible when things go wrong. The vendor from which clients buy a cloud service -- just as storage or email -- often is the customer of but another cloud service supplying infrastructure for that service. Given all that, determining the cause of a problem can be difficult and frustrating for IT departments.

Encrypted email offering

Catuogno already had some experience providing research services to its customer base with an encrypted email offering and thought adding storage services would create a new line of business, says CIO Blake Martin.

What's more, while the sales process, the cloud storage provider misrepresented the depth of its relationship with a second company, the one that in fact developed the core research behind the service. When Catuogno ran into trouble, the cloud company didn't have enough clout with the core vendor to bring about an effective resolution.

"It's not that they were unresponsive. It's that they couldn't address the problems themselves and they didn't have enough influence" with the core research developer, Martin says.