March 25, 2011, 2:08 PM — Three years ago, a luxury retailer with a growing online business faced a nightmare situation: The order fulfillment service provided by its SaaS vendor for online transactions went down for two days during the critical Christmas season. The retailer's website couldn't accept orders for a 48-hour period, resulting in frustrated customers and lost business.
In an attempt to mend relationships, "we ended up shipping big gifts after Christmas to customers [who were affected]," says a former senior IT manager with the retailer, who asked that his name and the name of the company not be revealed.
The relationship between the retailer and the SaaS vendor, which had provided the company with order fulfillment services for four years, was irreparably damaged.
Although the retailer deals in luxury goods and therefore is not a high-volume business (2,000 transactions would be considered a busy day), it had grown from roughly $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.
But the manager and his company will never truly know the cause of the outage.
Before the client could terminate the relationship, the SaaS provider acted first, asking the retailer to get off its platform within six months. The only explanation offered by the vendor was that it couldn't provide the type of "white-glove service" the retailer required.
"It was a very ugly situation between the vendor and us. There wasn't much [either side] could do regarding repairing the relationship," says the IT manager.
Sweet turns quickly to sour
Relationships between technology vendors and their customers 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 technology 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.
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What's more, IT products comprise multiple components -- hardware, software and, often, customized coding to fit the customer's environment -- making it difficult to pinpoint where the issue lies when problems arise, and which product or vendor is responsible.