Tech Bytes: Evaluating IT Vendors: Three Lessons from the Dotcom Crash

For millennials it’s little more than legend, but the dotcom crash of the early 2000s was a very real event for any retail IT professionals of the Gen X or Baby Boomer demographics.



As retailers prepare to kick off the technology conference/user group season with the upcoming NRF “Big Show,” it might be a good idea to review a few lessons from that era about how to properly evaluate vendors and solutions.



A Shaky Investment

Obviously part of the vendor evaluation process is examining how likely it is they will be around to offer long-term support and upgrades. Many vendors, especially newer and lesser-known start-ups, will brag about the vast investments they have raised.



While a lack of investment capital is a sure red flag, simply having the backing of investors does not guarantee the health or viability of a vendor. Plenty of well-financed technology providers went belly-up during the 2000-01 crash. Investors can and do make bad decisions, and technology companies do not always use capital wisely. Look for investor backing, but use it for initial vetting purposes only.



Cocktail Napkins Don’t Cover It

Many major technology deals were supposedly sealed during the dotcom years based on sketches and business plans drawn up on cocktail napkins. The actual use of cocktail napkins may be apocryphal. But it’s safe to say a lot of vendors got off the ground with little more than a general idea about a solution, only to crash soon after.



If a solution can be summed up a little too quickly and succinctly, that may be a sign it is not fully developed enough for implementation. Also, if a vendor seems to keep asking what type of functionality you need and then assuring you their solution offers it, that is also a tipoff the solution is still “under development.”



This is not to say that only complicated, difficult solutions are any good. On the contrary, a solution’s basic functions should be fairly easy to explain. But if the easy explanation doesn’t rest on a more complex foundation, take caution.



Beware Buzzwords

Everyone in high tech seems to love buzzwords. In the dotcom days, the big buzzword was actually a letter – “e.” Solutions were offered that “e”-enabled (shorthand for Internet-enabled) every retail function from sourcing to transaction processing.



In an time when the notion of selling consumers products on the Internet was still novel, “e-“ solutions were a big deal. But solutions that simply focused on connecting a retail activity to the Internet, rather than actually solving underlying business challenges, did not last beyond 2001.



Fast forward to today, and the big buzzwords are “omnichannel” and “seamless.” Many omnichannel solutions do little more than let retailers display products across different channels and screens, without any functionality to address complicated back-end issues. Vendors of this type of seamless retail application will not likely last long, and their clients won’t be doing much to ensure long-term success, either.