Tony Greenberg

The Technologist's Guide to Trust, Tech, Life and Society

  • Tech
    Tech
    Show More
    Top News
    customer demand
    Why Good Service Is All About Trust
    December 17, 2024
    detroit decay
    Where’s My Flying Car … and an Efficient IT Market?
    December 17, 2024
    Trust Your Tongue – The Only Wine and Spirit Critic That Matters Is You
    December 17, 2024
    Latest News
    The Decay of Modern Day Communication & Demoralizing Lack of Accountability in Personal Messaging Which is Especially Dangerous Given all the Nearby Baboons
    December 2, 2024
    MARC ANDREESSEN REBUTTAL 2020
    December 10, 2024
    How CIOs Must Maximize ROI ~ Learn This Or Find A New Role – Joe Weinman
    December 12, 2024
    10 Magic Questions to Make Your Project Go Right- How to Kick Ass by Kicking Assumptions
    December 12, 2024
  • Business
    Business
    Show More
    Top News
    customer demand
    Why Good Service Is All About Trust
    December 17, 2024
    Simplify your life
    From Dr. Bronner’s to Pressure Cookers
    December 17, 2024
    Trust Your Tongue – The Only Wine and Spirit Critic That Matters Is You
    December 17, 2024
    Latest News
    The Decay of Modern Day Communication & Demoralizing Lack of Accountability in Personal Messaging Which is Especially Dangerous Given all the Nearby Baboons
    December 2, 2024
    Hiding Fees & Tips in the Transparent Age is Just Bad Business
    February 21, 2025
    More Ignorance or Indignance in the Wake of Covid-19?
    February 21, 2025
    MARC ANDREESSEN REBUTTAL 2020
    December 10, 2024
  • Tony
    Tony
    Show More
    Top News
    The Arithmetic of Relationships > What’s Our Mutual Net Profit?
    January 26, 2025
    HIGH HELLS – The Demise of Powerful Femininity
    December 12, 2024
    Mastering Human and Business Development
    December 9, 2024
    Latest News
    Trap: How DMN8 Gym Became A Poster Child for Fitness Fraud
    May 16, 2025
    DMN8 The Most Beautiful (Crooked) Gym in the World?
    May 16, 2025
    Mastering BD: The Art of the No That Opens the Real Door
    March 22, 2025
    Productivity Apps That Rocked My World in 2024: Secrets of a Workflow Wizard
    February 25, 2025
  • TonyG: Transforming Industries and Perceptions
Reading: Making IT Fit Like a Good Shoe, Or, 10 years later, and RampRate has a long way to go!
Share
Aa

Tony Greenberg

The Technologist's Guide to Trust, Tech, Life and Society

Aa
  • Tech
  • Business
  • Tony
  • TonyG: Transforming Industries and Perceptions
  • Tech
  • Business
  • Tony
  • TonyG: Transforming Industries and Perceptions
Follow US
Tony Greenberg > Blog > Business > Making IT Fit Like a Good Shoe, Or, 10 years later, and RampRate has a long way to go!
BusinessFeaturedTech

Making IT Fit Like a Good Shoe, Or, 10 years later, and RampRate has a long way to go!

Tony Greenberg
Last updated: 2024/12/16 at 5:39 AM
Tony Greenberg
Share
8 Min Read
IT services
SHARE

 

“Money is the opposite of the weather. Nobody talks about it, but everybody does something about it.” – Rebecca JohnsonI.T. services

In 1996, I recognized a problem in the way IT services were bought and sold. The sales process wasn’t set up to solve a customer’s problems. Instead, it was set up to close a deal. Unfortunately for IT buyers, there really weren’t any better alternatives.

And the process wasn’t much better for the sellers either. Vendors were burdened with trying to provide excess requirements for the least cost, regardless of market value or actual need. In the middle, a massive amount of cash was being lost as the two tried to come together. Where did that cash go? Mostly into sales and marketing, which is ultimately about bringing two sides together to do a deal?

I first noticed this issue in the mid-1990s, when I was coaxed out of early “retirement” to work for K.B. Chandrasekhar and B.V. Jagadeesh, whose Internet services company had grown into a powerhouse called Exodus Communications.  Barry James Folsom and Mark Bonham hired me to help grow Exodus even more. Three years after starting Exodus, Chandra and B.V. took it public.

“If we could sell our experience for what it cost us, we’d all be millionaires.” – Abigail Van Buren

I will never forget Chandra passionately telling me I was hired to “put a face on the place.” I am almost sure he meant to create a brand that was known by all. Regardless, by the time I left, Exodus had a $37 billion valuation. There are so many stories to share about the transformation that made the Internet what is it today, from our stoic CEO Ellen Hancock, who fought off the collapse of our business model in a terse phone negotiation I set up with BBN Planet’s Vint Cerf, to our first managed-services deal with something perplexingly called an “enterprise account.”

I never had a formal title working for our marketing vice president, the great thought leader Mark Bonham, or Sam Mohammad, the vice president of sales. I was “the marketing guy.” Whatever was needed to help the company grow, from global data-center launch strategy to managing Keynote’s dumb test of our network, to advertising and marketing, to schmoozing clients, there wasn’t anything I didn’t poke my nose into.

Over time, I noticed that Exodus had a corps of salespeople busy signing all the deals my work was helping support. The salespeople were paid a ton of money (6 percent of every deal’s value) as soon as the deal closed. And they were paid long before Exodus got paid. That was interesting, I thought.

“Everyone lives by selling something.” – Robert Louis Stevenson

As Exodus grew, it added another layer, in “strategic” sales. The strategic guys got paid another 6 to 10 percent of the deal. And then Exodus added another layer, the channel salespeople.  They got paid a lot, too. Plus, we paid our channel partners another 10 percent of revenue.  So, at least 22 percent of every deal went to sales, rather than client services. Some sales people were making $1 million a year.

Were they worth it? I’d say yes, absolutely, given the system the company had to work in. I just never thought that system made sense. So why was that?

Because after every deal, I saw the same scenario:  the sales guys and the client’s executives toasted the deal. Meanwhile, off to one side, the project managers from Exodus and the client were saying, “Okay, how are we going to make this thing work?” That was followed by, “Let me tell you what I really need.”

That was when the real work started, and the real headaches too.

“The only thing you got in this world is what you can sell. And the funny thing is that you’re a salesman, and you don’t know that.” – Arthur Miller

 

Though the dot.com meltdown put Exodus and many other companies in Chapter 11, it didn’t end the structural problems that complicated making deals.

Exodus’ successors still needed an expensive sales operation to drive the deals that sustained their companies. And their customers still needed reliable, reasonably priced IT services. Yet, between the two sides, they kept signing disastrous deals that hobbled everyone. I kept thinking there had to be a better way.

So in 2000, I created RampRate Sourcing Advisors, to build a more fluid, rational marketplace that simplified the brain-melting process of connecting the customer’s exact needs of customers with the vendor’s exact capabilities and pricing.

“Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason.” – Ayn Rand

Over the years since then, the RampRate business model has gone through a few tweaks, but it basically works this way:

  1. Clients and RampRate create a detailed set of IT requirements and preferences.
  2. We run that information through RampRate’s SPY Index to determine the best vendor. The SPY Index includes the services, prices and other details of more than 350 vendors.
  3. Then we create a detailed contract with service-level agreements, graduated non-performance penalties and more.
  4. We save clients time and money, and ensure they are happy with their decision. And we save the vendor time and money since they don’t chase deals that are a bad fit. Finally, we help them quickly negotiate a deal at an appropriate rate.

“Life’s too short to sell things you don’t believe in.” – Patrick Dixon

So, it’s a decade later, and RampRate has saved our clients a ton of money. And 98% of the deals we’ve created actually fit both the customer and the vendor so well that they sustain the relationship through the life of the contract.  They become like a good pair of athletic shoes you hate to throw away. These are deals for the long haul.

But what’s next? We still haven’t created the perfect fluid, dynamic and efficient IT marketplace for everyone. Entire sectors still do IT deals the old-fashioned way, with dubious sales pitches, unenforceable contracts and unsustainable expectations. We can all do better.

In the coming weeks, let’s discuss 15 myths that fuel this mess, and keep us from a better IT marketplace. Then we can work together to make it better. RampRate can be heard at www.ramprate.com/blog

“Sell cheap and tell the truth.” – Rose Blumkin

 

“Buying is a profound pleasure.” – Simone de Beauvoir

Share this:

  • Click to share on LinkedIn (Opens in new window) LinkedIn
  • Click to share on Facebook (Opens in new window) Facebook
  • Click to share on X (Opens in new window) X
  • Click to share on Pocket (Opens in new window) Pocket
  • Click to share on Pinterest (Opens in new window) Pinterest
  • Click to share on Tumblr (Opens in new window) Tumblr
  • Click to share on Reddit (Opens in new window) Reddit
  • Click to email a link to a friend (Opens in new window) Email
  • Click to print (Opens in new window) Print

Related

You Might Also Like

The Decay of Modern Day Communication & Demoralizing Lack of Accountability in Personal Messaging Which is Especially Dangerous Given all the Nearby Baboons

POWERING PURPOSE-DRIVEN INNOVATION

Innovative Thinking with Tony Greenberg – The Scale Up Show with Ryan Staley 2024

Forward Health is a sideway step at best

Hiding Fees & Tips in the Transparent Age is Just Bad Business

TAGGED: deals, information technology, IT, outsourcing, RampRate, sales

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
[mc4wp_form]
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share this Article
Facebook Twitter LinkedIn Copy Link Print
Share
By Tony Greenberg
Follow:
I speed through life building relationships, businesses and finding extraordinary people and contemplating the curious decisions they make. The premise of this space is to expose the bridges and chasms of trust, truth and bias that I encounter daily.
Previous Article Trusting Your Tongue, You’re the Expert .
Next Article Break Out the Buggy Whips. Is Now the Tipping Point for Streaming Video?
1 Comment 1 Comment
  • Mark Hamade says:
    March 7, 2015 at 2:16 pm

    Well written, accurate, heartfelt article written by a visionary thinker with an amazing motor & work ethic.

Leave a ReplyCancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Stay Connected:

Business InsiderHuffington PostRSSTony on TwitterTony on FacebookRampRate on FacebookTony on LinkedIn

Business Insider

Huffington Post

RSS

Twitter

Facebook

Linkedin

Forbes

Latest News

Trap: How DMN8 Gym Became A Poster Child for Fitness Fraud
Tony May 16, 2025
DMN8 The Most Beautiful (Crooked) Gym in the World?
Tony May 16, 2025
Mastering BD: The Art of the No That Opens the Real Door
Tony March 22, 2025
Productivity Apps That Rocked My World in 2024: Secrets of a Workflow Wizard
Tony December 11, 2024

Copyright ©2000 - 2024. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?