Avoid Buyer's Regret: Top Tips for Assessing Infrastructure Provider Health Before Purchases and Contract Extensions

With large enterprise infrastructure purchases for services, including SASE, SD-WAN, wireless, and more, on the line, the tech behind the services may be proven, but can the provider deliver? Is the provider having business problems? What can buyers do to avoid regret or devastating mistakes?

"Enterprises are going to have to prepare for a lot of vendor consolidation over the course of the next two years and then service provider consolidation through the end of the decade," explained Jeff Heynen, VP of Broadband Access and Home Networking at Dell'Oro Group, a global market research and analysis firm. "Right now, because operators are cutting back on their spending, vendors are retrenching and looking to cut costs. Some are looking to shed parts of their business to focus on their core operations."

A Provider Health Checklist

Here is a list of items to check to help determine how a potential tech partner is faring business-wise.

Strategic reviews: Rarely announced publicly, in favor of behind-the-scenes activity, these crucial undertakings often result in substantial changes in the way a service provider or vendor determines its product and staffing priorities. The results can lead to phasing out products and business units and result in several of the actions listed below.

Project cutbacks and selloffs: One major infrastructure player confirmed late last year that it was cutting back its fiber service deployment markedly and sold parts of its tech assets, including CDN customers, to a major player in the sector. It is best to know of these actions as soon as possible before they are announced publicly.

Layoffs: Staff reductions can also signal problems as these cost-cutting efforts are often justified as rightsizing. The goal here is to determine why they are needed. Is your provider outsourcing a potentially crucial function, such as service and support, to a third party or preparing to drop a product line? Layoffs are expected after a merger or acquisition to eliminate duplication of efforts. But how will they affect your business?

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