The New ISNI

Ronald S. Katz

Independent Service Network International (ISNI) started out as an organization of what was then called Third-Party Maintenance Companies. The year was 1985 and the third-party maintenance companies, later to be called Independent Service Organizations, were trying to deal with a wide range of problems in their infant industry.

Most TPMs, as they were known, were started by entrepreneurial field engineers at OEMs. At first relations between the TPMs and the OEMs were friendly for several reasons. First, the TPMs were usually intensely loyal to the OEMs because it was the era of proprietary systems and, the more machines that the OEM sold, the more machines there were for the TPMs to service. Second, the OEMs were making so much money selling the machines that service was a cost center rather than a profit center.

The relationship between TPMs and OEMs became tense when computers became a commodity and profits on the boxes started to go down. At the same time, profits on service were skyrocketing because of the end-users intense need for service and because the machines were quite reliable, making the service contract more like an insurance contract.

At this point, the OEMs decided to compete more intensely with the TPMs. Therefore, the OEMs began to withhold such things as parts and diagnostics, which they had once made freely available to the TPMs. In many cases, these refusals to deal violated the antitrust laws and created legal needs among the TPMs.

One of the large TPMs at the time was a part of the Grumman Corporation, and, under the leadership of Al Andrus of Grumman, the ISNI, then called NCSN for National Computer Service Network, was formed in 1985. The idea was to band together for both offensive and defensive reasons. The defensive reasons had to do with the legal problems mentioned above. The offensive reasons had to do with networking because most of the members of NCSN were regional companies. The idea was for these regional companies to be able to provide national service by networking with other regional companies.

The organization was quite successful but also somewhat limited because its members were only maintenance companies for computers. Because of the way it began, it had a definite anti-OEM bias. The first expansion of ISNI occurred when it merged with AIMS, an organization of medical technology service companies. That is when the ISNI name came into being. The addition of the medical service companies was natural because they were up against the same set of problems as the computer maintenance companies. Recently another addition has occurred with companies that maintain office equipment.

One of the big successes of the ISNI was its support of the Kodak case, a Supreme Court case which legitimized the existence of service companies in high-technology aftermarkets and held that the withholding of parts and diagnostics could be antitrust violations in those markets. Shortly after Kodak, an even bigger victory occurred in the marketplace when OEMs essentially became ISOs, or, as they preferred to refer to themselves, multi-vendor servicers. At this point the adversarial relationship between ISOs and OEMs began to diminish because the OEMs had the same needs as ISOs for the parts and diagnostics of other OEMs. A new era began of alliances or, as some called it, "coopetition."

If an OEM or an ISO did not have the capability of servicing a machine that an end-user wanted service, then that OEM or ISO could subcontract with another OEM or ISO who had that capability. Although there were still some adversarial relationships among ISOs and OEMs and there were still some antitrust violations, particularly among OEMs who did not engage in multi-vendor service, it is fair to say that the OEMs and ISOs recognized their need for one another. This recognition has caused ISNI to go in a new direction: open systems and open support. The ISNI is now not open just to ISOs but to OEMs and resellers as well who support open systems and open support. This change is reflected in the ISNI's new mission statement: "To enhance the high-tech industry by promoting an open environment of interdependence and cooperation between manufacturers, independent servicers and users by providing value-adding solutions for customers."

The ISNI does this by providing the following:

  • Enhancing an open environment of user choices;
  • Creating forums between vendors, servicers and users for education, communication and information.
  • Promoting effective cooperation between manufacturers, independent users and customers;
  • Encouraging adoption of new technologies, processes and programs for improved services; and,
  • Facilitating successful adoption of high-technology products and systems.
  • Not everyone can belong to ISNI. Only those who are willing to take the following pledge may join:
  • ISNI Pledge

As a condition of our organization's membership within the ISNI, we wholeheartedly agree to take an active and participatory role in the affairs of the association. We further agree that we will fully adhere to the ISNI's fundamental tenet of fair and nonrestrictive business practices. To that end, our organization hereby pledges that we will not participate in, or promote, any of the following anti-competitive practices.

Restrictive Policies: We will not attempt to limit fair and open competition through any form of restrictive policies pertaining to the service and support of products manufactured, resold, integrated or supported by my company.

Software Licensing: We will make available unrestricted access or fair licensing pertaining to any operational and/or service software required to install, calibrate and repair, products manufactured by my company.

Repair Parts Sales: We will not prohibit or restrict the purchase of repair parts or components required to effectively maintain products manufactured by my company.

Documentation Sales: We will not refuse to sell, or offer to sell at restrictive prices, documentation required to install, calibrate or maintain products manufactured by my company.

Training: We agree to make available the necessary training on products we manufacturer.

Tech Support: We agree to make available Tech Support.

Test Equipment: We agree to make available any test equipment required to support products we make.

End of Life Equipment: We agree to make available end of life support on equipment.

Cooperation: We will cooperate with other vendors, servicers, and users of other products or services in multi-vendor open systems environments. The more members ISNI has, the more effectively it can perform its tasks. If you are interested in joining, you should contact Claudia Betzner, Executive Director, ISN International, 494 Ansley Walk Terrace, Atlanta, GA 30309, telephone 404/885-9908. Open service and open support are ideas whose time has come.

Mr. Katz is a partner resident in the San Francsico office of Coudert Brothers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.