What would it take for a tech vendor to walk away from a customer?

Turning down business isn't an everyday occurrence, but for tech vendors there are situations where it's the best course of action, as Sooraj Shah finds out.

A new customer walks into a grocery store to buy a loaf of bread. They have the right money, and walk to the shopkeeper to pay for it, but the shopkeeper declines their business. Unheard of. In the technology business-to-business world, there is a far more complicated relationship between customer and vendor, meaning this kind of interaction - while still rare - does actually happen.

There are those instances which are well-documented such as hosting provider Cloudflare terminating the contract of forum 8chan. While these companies did not violate the terms of the contract, they "violated the spirit", according to Matthew Prince, Cloudflare's CEO, who added that it directly inspired tragic events, referring to three mass shooters uploading manifestos to the platform before going out and committing terror attacks.

Morals and the spirit of a contract are often used as a reason to stop working with another customer. For instance, David Friend, CEO of cloud storage provider Wasabi, says that the company doesn't charge for Egress or API requests, but that some customers have abused that privilege.

"I'd say that we've probably had three or four instances where someone will put a movie up on Wasabi and they'll send the link to it around the whole world, and with thousands of people trying to play the movie, and that's not really what Wasabi was designed to do, so we have to say to these customers ‘look we'll store your movie, but if you want to distribute it, you'll need a content distribution network (CDN), and here are three partners of ours that do that," he says.


Gaming the system

Friend suggests that Amazon Web Services and Google Cloud, like Wasabi, would monitor how customers are using their services and whether anyone would be trying to ‘game' the system.

"In our terms and conditions it states if you put an undue burden on our infrastructure then we're going to ask you to change what you're doing, and if not then you're going to have to go away," he says.

One area where customers may look to exploit the capabilities offered by a vendor is with artificial intelligence (AI). Nick McQuire, analyst at CCS Insight, says that this is particularly the case with facial recognition.

"We've seen cases of companies where the cloud providers tell their customers that this isn't the right use of the technology based on their own principles around how the technology should be deployed," he says.

Last month, Amazon said it was putting in place a one-year moratorium on police use of Rekognition. After years of controversy around who is responsible - vendor or customer - about the use of the technology, Amazon called for governments to put in place stronger regulations to govern the ethical use of facial recognition technology. While this stopped short of Amazon walking away from a customer, it shows the steps that vendors may take to ensure that its technology is being used appropriately.


Values over profits

Ed Butler, CEO and founder of cloud and colocation services business Amito, explains that the business has a set of values that it refers to when it comes to difficult customers. In one example, a customer wanted Amito to do something that wasn't considered best practice or technically robust, and Butler and his team had to explain that while it was possible they could do this, it wasn't something they were comfortable doing.

"We don't want to provide solutions that we wouldn't run our own business on. We had to tell them that if they wanted us to do it this way then unfortunately we weren't the right company for them. It's a horrible feeling turning down business but it's a difficult decision that you sometimes have to make," he says.

Sometimes the issues with a customer are not about the use of technology at all.

"I tell my staff if someone is disrespectful or unprofessional to my team then I will literally pick up the phone and ask the customer that they respect my team - not swear or shout at them," says Carlene Jackson, CEO of Cloud9 Insight, a consultancy that focuses on deploying Microsoft Dynamics 365 to SMEs.

Jackson uses the analogy of shouting at a TfL worker who is standing on the platform, if a train is delayed.

"[My staff] haven't done anything wrong, it's not personal or their fault. Customers need to treat IT providers as partners, if they treat us like a supplier and if it's all about squeezing suppliers for margins and beating their providers up then they're not going to get the most out of their provider," she says.

This is often a cultural issue; with customers from other countries having a different way of working than those based in the UK, Jackson suggests. Nevertheless, Jackson has had to walk away from many of these customers because they haven't been able to change the way they've worked.

"At the end of the day I'm not going to risk losing my employees or reducing staff morale. If they're doing a good job that's more important to me than my customers," she says.

Butler echoes Jackson's views.

"There has been one case in the last few years where a customer has not been kind or fair, and we've said to them that our values are more important than making a profit and that they needed to show our team the same respect they were shown," he says.

Unfortunately, the customer in question couldn't change the way it worked and so Amito stopped working with them.

While it is rare that tech vendors turn away business, sometimes they have to take a stand. It's up to the vendor to ensure that their customers are fully aligned with them on values, morals and principles, and that their staff get the respect they deserve. If they don't continuously monitor these things and vet companies beforehand, they could suffer from reputational damage, legal threats and subsequently lose more revenue in the long-term.