The first section assesses vendors' viability by asking for a quick assessment of the following five criteria:

The vendor's time to profitability: Most xSPs (even those that are public) are still unprofitable. Although the vendor many not be directly forthcoming with this information, clients should estimate the time to become profitable from normal business operations.

The vendor's financial condition: During financial downturns, many good startups failed to secure secondary/tertiary rounds of funding. Clients should ensure that the vendor has sufficient cash to carry it to profitability and not depend on promises of future funding.

The vendor's risk of acquisition: Is the vendor likely to choose acquisition as a payout for investors and founders, and will acquisition result in key people departing from the company? During most outsourcing acquisitions, services continue without disruption, but they can introduce uncertainty into the relationship.

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The vendor's likelihood of exiting the market: During troubled times, we have observed, some xSPs simply switch target markets, change offerings, and head in another direction. The primary cause is that they were not winning business. Clients must ensure the vendor is being awarded other contracts.

The vendor's responsiveness during previous problems: During every outsourcing relationship, something will go wrong. An important trait is how the vendor responds during problems. If the vendor is becoming unresponsive, that should serve as a warning indicator.

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