A new report released by the legislative auditor for West Virginia has accused officials of overspending millions of dollars of federal money on unneeded routers in 2010. It appeared that the lack of proper due diligence, together with unconscionable recommendations of the key vendor, resulted in the purchase of enterprise-level hardware designed to serve hundreds of concurrent users, but which were deployed in many instances at locations with just a handful of users.
You can read the full report on the purchase of the routers, or the excellent Ars Technica write-up of the most egregious examples.
So how does this incident relate to small and mid-sized businesses? You see, while penny-pinching small businesses are probably more guilty of not spending enough on IT as opposed to overspending, the entire debacle does underscore the importance of rightsizing equipment for intended, and future, needs.
Consult Your IT Department
The primary danger to SMBs is that their relatively smaller size may preclude robust procedures and channels for the purchasing of IT hardware. As such, it may be entirely possible for a senior executive or business owner to commit to a purchase without properly understanding the situation.
Indeed, I once worked for an SMB where the business owner purchased a large number of portable scanner devices for the business with the intention of integrating them into the workflow. Unfortunately, their architecture and poor API meant that they were completely unusable. They were obtained for a discount, as I understand it, though 200 units still added up to a substantial sum that went down the drain.
Put it this way: Sales executives are typically paid a commission based on the value of a sale. This does necessarily skew their recommendations toward bigger, more expensive gear, often with future “requirement” or “growth” as a key persuasion. Unless the decision maker is highly technically savvy, however, relying on such recommendations is a very poor choice.
When making big purchases, my opinion is that decision makers should always check with the IT department or manager. For businesses without qualified IT personnel, go for an independent outside expert to verify that the hardware is right-sized to your company’s needs.
Go for Business-Grade Hardware
Of course, some businesses may use this cautionary tale of what transpired in West Virginia as proof that SMBs should never go for enterprise gear. Before heading out to purchase the cheapest consumer hardware available, though, businesses must remember that there are real differences between consumer and business-grade hardware, as I outlined in Avoid Using Consumer Networking Equipment for Your Business.
Other benefits may include access to an actual engineer through the phone, a more robust design for continuous 24/7 operation, or just better electronics under the hood so that the vendor can honor the five-year warranty with confidence. With some homework and diligence, it is possible to find excellent business-grade hardware at affordable prices.