Companes hoping to exploit the economic downturn to hammer down prices on IT procurement could find vendors turning...
their backs rather than compete on price.
The warning comes from Hewlett-Packard, which has walked away from several large deals because it was not prepared to compete on unviable pricing.
Although there are numerous incentives on offer, including zero financing and extended warranties, there is a clear limit to how far a customer can go to barter deals down.
Steve Gill, vice-president and managing director of HP UK and Ireland, said today that HP had walked away from contracts and would do so again if they "didn't make sense".
"Some of our competitors have signed up for suicidal deals where they will lose a fortune as they supply that deal to the customer," he added.
Gill said that he believed "some sanity will prevail" as both vendors and customers stopped supporting and demanding such low priced deals.
Iain Stephens, director of enterprise storage and servers UK and Ireland at HP, said that it had recently been involved in an e-auction that ended after 27 minutes because no one was bidding.
"Everyone wants to get a better price," he added "There is a lot of pressure but everyone is trying to be sensible about pricing."
More details on Microscope