The vendor dilemma: risks and possibilities
by Magnus Broden
When sourcing smart home premises equipment, choosing a strategy to go with either one or multiple vendors is often a dilemma. Both options offer different upsides and downsides. In this blog post we will take a closer look at both strategies to assess pros and cons and look into the possibilities of a middle ground.
The single vendor strategy
Choosing a single hardware vendor strategy may, at least at a first glance, seem like the most attractive option. This alternative offers a single negotiation partner and all the formal procedures – buying process, delivery, support and so on – has one point of contact. A single vendor strategy requires less training for your staff, and you can focus on one singular product line and a more straightforward provisioning process. From a technical point of view, there is less of a risk that new products or updates will have a bad impact on the running systems, or that they won’t be compatible.
On the downside, putting all eggs in one basket makes it difficult if the communications service provider, CSP, becomes unhappy with the vendor and wants to change to a different one. This usually entails substantial switching costs. Such a vendor lock-in also comes with a loss of flexibility and makes the CSP dependent on the roadmap and marketing decisions of the vendor. Primarily though, the problem with a single vendor strategy boils down to a loss of power in price negotiations and becomes an expensive route to take in the long run, as there is no competition between vendors.
The multi-vendor strategy
To open up for competition and lower prices, most CSPs choose to go with a multi-vendor strategy. Deploying this alternative doesn’t generate any hardware dependency and the CSPs can choose from an array of brands with significant CAPEX savings.
But even though this is the preferred route to take, there are several challenges to consider. Each hardware is different and is also coupled with its own vendor specific software. This means that resources for training and internal competencies for the various hardware types and software versions need to be allocated, which drives cost.
This approach also causes problems when developing a service offering for the end customer. Each CPE vendor has a different vision about which services and functions they want to provide and develop for their products. A CSP, however, can only have one singular vision to move forward with, meaning that the only way to offer a consistent service offering is to boil it down to the lowest common denominator between the different vendors’ services and functionalities.
Is there a perfect medium?
At the core of device functionality is the software. But since different vendors use different software, homogeneity is harder to achieve. The ideal would be to both open up competition between hardware vendors, as well as providing a homogenous array of functions and services. But how?
One solution is to decouple hardware and software, making it possible to install one type of software across the board. Then CSPs could offer the same functions and features regardless of hardware. This would however require highly standardized hardware types. That way, the CSP can have the software strategy drive the hardware requirement specification and obtain long term life cycle management.
Another way to homogenize usage of multiple hardware types is to use an ACS (Access Control System) – a management system that gains access to the end-user’s network, which also allows for new services and features to be implemented, even if software types differ.
To learn more about decoupling and the how access control systems helps to achieve homogenized usage of multiple hardware types, feel free to contact us, or read more about it in our guide.
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