Been very busy … good busy … but busy.
Brief T&C discussion, as this is near and dear to my heart right now.
We find lots of variation in T and C documentation. Some of it is reasonable, some is simply ridiculous. Call it onerous, call it egregious. The vast majority of the ridiculous language focuses on providing a huge lever over the seller by the buyer. Some of my favorites are “we can return it if we want, for any reason, and you have no recourse whatsoever”, “you will pay for our costs if we decide to go another route”, “you may not charge fees for late payment, or institute collection actions”, “you will give us most preferred customer pricing, regardless of how little we buy from you”, and “we will pay when we please”.
Unfortunately, every term like this increases company risk to do business with such an entity. And in most cases, you cannot increase the reward for this opportunity, to offset this increased risk.

We offer our units with our T&C, priced with our T&C in mind. We generally have no problem making modifications to our T&C, to handle reasonable requests. Our T&C are not onerous, they are not egregious, one sided, or punitive. The clearly indicate what we are legally obligated to do, without turning thumbscrews to us, or you the customer. Our document decreases risk by clearly delineating what will happen in various situations, and providing a framework for operations.
In contrast, many of the T&C documents we see (massively) increase one parties risk, making what constitutes unreasonable demands.
With onerous T&C you place your suppliers at increased risk. You want to reduce your number of suppliers? Keep these terms. Intelligent suppliers will leave the market rather than take on the increased risk of existentially challenging T&C.
Which will reduce competition. And increase prices.
Lets ask LNXI how their acceptance of risk went. Or SGI.
Bad T&C increase risk. What we need are uniform, reasonable T&C, that don’t slow down commerce, that everyone can agree to. Fighting the T&C battle at every purchase is a waste of effort and time. Simply agreeing to the ridiculous things we see is an existential risk.
The buyers with the onerous T&C may indeed find vendors desperate enough to agree to the onerous T&C. It is not in the buyers long term interest to have such T&C, as you may find your bids only attracting the desperate suppliers, if any at all.
We have one T&C that was frankly amusing. It demanded 24×7 support free of charge for the warranty period, and then the same thing after the period expired, for the “life of the equipment”. I don’t know if they were able to find a vendor that would agree to give them free service and support in perpetuity. It wouldn’t surprise me if they received no bids, or bids which specifically elided the ridiculous terms. We asked them if they would consider revising their terms. They said no. So we didn’t bid.
Lets have reasonable procurement T&C in HPC. Lets enforce reasonable terms, and have everyone play on a level field. Or there might not be enough players in the future to service this market.

1 thought on “T&C's”

  1. One of my favorite quotes on this topic comes from then Rackable CEO Mark Barrenechea about his utter lack of interest in pursuing “unfavorable business.” Early signs (from the PSC deal) are that he’s brought that attitude to SGI. Good for him.
    Unfortunately it only takes one company who needs to make revenue numbers to cut prices low enough — or bend all the way over the table on T&C — to give those customers the reinforcement they need to ask for the moon (and expect it) next time around.

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