When the ‘discontinued product’ notice hits your desk

As a small provider in the suburbs north of Toronto, Aurora Cable is cautious with its spending.

The 43-year old company counts about 20,000 cable subscribers, and about half of them also take Internet connectivity. About 2,000 also buy its VoIP service. So when it went looking almost three years ago for a new core router, it wanted something that would last at least five years.

It invested in a Foundry Networks Netiron IMR 640 MPLS router, which supported up to eight line modules “We’re a small company and the whole reason we bought it is it’s a big chassis, and modular to grow with us,” recalled Aurora chief technology officer Brian Challenger.

So just over a year later his staff was stunned to learn that that model would be discontinued two months later, in December, 2006. Apparently the company made an announcement that didn’t get to Aurora. Now it had little time to decide what to do.

“We were a very early adopter in Canada of that chassis, which may have been a big mistake on our part,” he acknowledges, “but we were looking for something that would do us for quite a few years. We figured if we got into a brand new chassis it would be in for a while, at least it would grow with us, which was the promise.”

“We could have bought an older product, but his was the newest line that was going to replace everything else.” Outraged, he demanded a discount on a replacement router, and an ironclad guarantee that unit wouldn’t be deadended either. They were terms Foundry couldn’t meet.

So Challenger pulled out the IMR 640 and plugged in a router from another manufacturer.

In an e-mail response to questions, Pavel Radda, Foundry’s media relations manager, said the company backed its five-year support of the IMR 640, which is good until December 2011. Customers who purchased a unit were also offered seven options with steep discounts to migrate to Foundry’s next generation routers if they chose.

“Some selected these options some were happy with their current infrastructure and kept their original solution,” Radda wrote.

Network managers may not like it, but it’s not uncommon for a manufacturer to decide hardware or software is toast. Perhaps it isn’t selling, perhaps the vendor has bought a competitor and wants to rationalize its lines. While most reputable companies will continue warranties on discontinued items, the availability of spare parts and modules may not be assured.

What buyers can do about it, before or after a purchase, is limited, say industry analysts. But a good defence starts with a good offence.

Paul Edwards, director of small and medium business strategies research at IDC Canada, pointed out that smaller companies are most vulnerable because they often don’t have a formalized contract process when dealing with IT vendors. They often rely either on advice from the vendor or the partners they buy products through. So he says choosing an experienced reseller or systems integrator is vital.

One possible protection he suggested is inserting a clause in a service level agreement that if the product being bought is no longer available after a certain date you can upgrade at a set discount.

“You may be able to cover yourself in your contract,” said Andy Woyzbun, a lead analyst at Info-Tech Research of London, Ont., who specializes in IT management, “but don’t depend on that.” And it offers no protection if the vendor goes out of business.

Rather than rely on the written word, a discontinued product is really a challenge of how good you are at getting the vendor to take responsibility for its actions and offer you some sort of protection.

Woyzbun recalls that before he became an analyst he was the CIO for a company whose vital database ran on a particular server. One day IBM bought that manufacturer and announced the brand was coming to an end at a point when Woyzbun needed to upgrade his server. Instead IBM offered one of its boxes, at an increase price. Woyzbun wasn’t interested.

“So we did a financial calculation, and we ended up getting a replacement box (and) all of the conversion support for the same price I would have paid for the incremental capacity,” he says. “And that was purely negotiation. There was nothing in the contract that indicated what IBM would do if they decided to withdraw manufacture of a particular product.”

However, he admits he held a good hand because his employer was a multinational company, a customer IBM didn’t want to lose. Still, his point is that striking a deal with a vendor is not out of the question.

The first line of defence, though, is picking the right vendors to buy from,

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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