ServiceNow ordered a year's worth of hardware to avoid supply chain hassles The tech world's pandemic supply chain meltdown drove ServiceNow to place orders for a year worth of datacenter kit in January 2022, believing that doing so was necessary to get the hardware it needed to cope with growing customer workloads. "Pre-COVID, I could generally get stuff in 45 days," CTO Pat Casey told The Register …
Just like every person who bought a few more loo rolls when the pandemic started, or driver who tops up their tank in anticipation of expected fuel supply problems.
The result is the same.
Each separate case seems perfectly reasonable when considered in isolation, but really it's just selfishly prioritising anticipated needs over other people's actual immediate needs.
Since when are companies supposed to take care of other companies? Are you one of those accountant run companies (the vast majority of them) where to save a few bucks the supply chain was rendered so fragile as to threaten the company's survival?
Or do you just question capitalism when it's finally not advantageous to you any more?
Good on these guys for planning ahead. Like Toyota did.
I have no compassion for technology companies run hy accountants rather than engineers where oh surprise that causes issues. Like Intel did.
Yes but placing the order does not guarantee that anything will be delivered, even if it is for a year in advance.
The reality is that the entire supply chain should be balancing the limited supply of parts so that what they can manufacture gives everyone a chance to buy something, not one company buy everything.
At the end of the day AWS, Microsoft, Facebook etc are probably taking containers of stuff before it even leaves China leaving crumbs for everyone else.
The loo roll panic buying was different: Sheple bought extra loo rolls "just in case" - despite the supply chain saying "There are no supply problems" (And there weren't - as was demonstrated by all the loo roll on special offer a few months later crowding the corridors after the initial panic buying)
This is the supply chain saying "There are problems, orders are taking longer to fullfil" and the purchaser adjusting their buying schedule based on the new lead times.
That’s not quite true, manufacturers in many areas increased production for the expected long term demand. only it didn’t work out ,so there was massive excess capacity in the system and much dead money sat on many warehouse shelves. it was probably cheaper to sell at cost than store it.
This post has been deleted by its author
It's not a "just-in-case" situation. ServiceNow (like most "good" businesses) bases their future growth on historical trends and buys accordingly - the only difference is that rather than keep the cash in the bank, they ordered 4 quarters' worth of kit in one go instead of quarter by quarter.
It would be a very poor CIO who made that decision without having the data to back it up, an even poorer CTO to make a mistake on what was needed and over-order, and the worst to anticipate growth and have to reject it because "we don't have enough servers"
With ServiceNow's current growth pattern, this is a perfectly sane decision. And, as mentioned by another commenter, it's not up to ServiceNow to solve every other company's procurement problems.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2023
