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A Well-Suited Pair
A NetworkWorld Reprint
by Lauren Gibbons Paul
The average network outsourcing contract is worth
millions and runs for five years, according to outsourcing
executives at Compaq. That information may lead you to
believe that outsourcing is only for large companies with
deep pockets, but it often makes a lot of sense for small
and mid-size companies, too, especially when the
outsourcing provider is also small.
It's not financially or practically feasible for Development
Alternatives to do business without outsourcing its entire
IT operation, says Larry Koskinen, chief information
officer and vice president of the Bethesda, Md., firm. With
a relatively modest $70 million in revenue and 300
employees, Development Alternatives helps grow the
economies of third-world or war-ravaged countries such
as Zaire and Bosnia.
The company's employees work
in areas with no
telecommunications
infrastructure, so there's no
possibility of simply extending a
T-1 line and adding some
network equipment to support
each new area. To make matters
worse, Koskinen's firm operates
in a low-margin,
government-subsidized market
and doesn't have a lot of money
to spend on technology.
"I don't have the capital to create my own bandwidth," he
says.
So the CIO turned to Houston-based Interliant to provide
network and help desk services worldwide. Unlike its big
outsourcing brethren, Interliant doesn't require its clients
to sign multiyear contracts. Development Alternatives has
been using the outsourcer's services for two years on a
year-to-year basis.
Although the contract doesn't contain service-level
agreements, Koskinen says the arrangement works fine.
"We've had an occasional glitch, but they've been very
responsive," he says of Interliant. The outsourcing
arrangement began as a personal business relationship
and evolved because of a high level of personal
interaction.
That kind of personal interaction was definitely missing
from the relationship between Berkshire Partners, a tiny
private equity investing firm in Boston, and a giant
outsourcing company. Chuck Kabat, a systems
administrator at Berkshire Partners, declines to name the
well-known outsourcer but recalls the company's
razzmatazz spiel about the benefits of its services.
Because Berkshire Partners had no network at the time,
Kabat had high hopes when he contracted with the
outsourcer to install a small NetWare LAN.
"After we signed on, [the initial contact] totally vanished. It
was an unpleasant surprise," Kabat says. He had no
rapport with the new contact, who was hardly ever around
and apathetic when he was. Even worse, the outsourcer
refused to help move Berkshire Partners to an NT
network several months later.
Kabat's boss had been reading up on NT and wanted to
know why the firm wasn't moving in that direction. "We
couldn't get an answer on why we did or didn't want to
[migrate to NT]. They wouldn't even give us a proposal,"
Kabat says. "They were totally in bed with Novell. They
didn't have any interest in NT, and we had no leverage."
Things got so bad after Berkshire Partners declined to
sign a multiyear deal that the outsourcer contact stopped
returning Kabat's phone calls, leaving him to deal with
printer and server problems on his own. Finally, a
desperate Kabat turned to an acquaintance who worked
at outsourcing start-up iCorps in Cambridge, Mass.
OHC solved Berkshire Partners' problems and seemed
to genuinely care, Kabat says. OHC also agreed to work
on a time and materials agreement, which suited
Berkshire's needs perfectly. "We work harder on the
relationship since it's not a sure thing," says Chris
Stephenson, a vice president at OHC.
Kabat no longer uses or pays for the big-name
outsourcer's services, but he has yet to officially fire the
firm. He wanted to see how long it would take the
company to get back to him, and it has been two years
and counting.
"The relationship just vanished," Kabat says. "We were a
pain in their butt."
Copyright 1998 by Network World, Inc., Framingham, MA
01701-9172 -- (800) 622-1108 -- An IDG Company --
985652
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