The recent research from Forrester highlighting the continuing complexity of software licensing and pricing is an issue that just isn’t going away. As a result, negotiating software licensing is not a task that most IT professionals are anxious to undertake. The process is fraught with uncertainty about exact usage, requirements and entitlements. It also comes with the risk of a software vendor requesting an audit - both of which can result in excess costs.

An organisation’s uncertainty about licensing usage tends to work in the software vendor’s favour. Without clear insight into their needs, many organisations overspend on licensing, buying enough of a buffer to cover their uncertainty and protect them from compliance problems and vendor audits.

With software licensing and maintenance spending accounting for a large percentage of IT budgets, this approach is very costly. You do not want to overspend for licenses, nor do you want to use any software to which you are not entitled. By arming negotiators with accurate information, organisations can reduce software spending and mitigate the risk of software vendor audits.

Solutions are available to provide organisations with accurate, relevant and reliable information about their existing software installations and usage. A simple, unobtrusive deployment gives organisations the ability to prove compliance and have more control and leverage in vendor negotiations.

How is your relationship with your sales rep?

This Forrester Research survey neglects the human component of any software vendor/ customer relationship. Unfortunately so do many corporate purchasers.

Buying incorrectly through the channel, calling in to the same company and seeking different quotes from different individuals and choosing the lowest price regardless of accuracy, ordering from a website when you're not 100% sure what you need or calling in and demanding service when your firm has let the relationship lapse all cost you the customer much more in the long run.

Professional salespeople like doctors, dentists and other professionals can only be of service to you if you avail yourself of them. Professional salespeople know your account's history, they understand your project, your business and if they want your business in the long run they will be your guide through the dangerous jungle known as the vendor's pricelist pointing out the options most aligned with your goals and your pocketbook.

Treat a salesperson like a pricelist and you will end up with results highlighted in this Forrester Research survey. Treat your salesperson like a professional; let them know your intention of being a long-term customer and let them know up front what your expectations are and both you and your company will be much better served in both the short term and the long run.

James Gingerich
Sr Partner Account Manager
Sybase iAnywhere Solutions
jgingeri@ianywhere.com
http://www.linkedin.com/in/jamesg2006

James, your comment is a little extreme.
I have worked with many enterprise customers and the best ones hide the fact they treat their sales person as a price list especially if you are selling software that is becoming commoditized.

Sales people want it complex to allow room for negotiation and the customers want it simple to be able to align needs with purchases. At the end of the day it is a song and dance between customer and salesperson and the customer, if they have the time, will do the research to get the best price since they are compensated by % savings.

So, let's get this straight. Customers don't like the way vendors are licensing their software?

What else is new? Forrester managed to probably spent tens of thousands of dollars to tell the world what is obvious on its face. I mean, seriously, of course customers don't like the way vendors are licensing their products - the vendors aren't giving 100% freedom at the absolute rock-bottom price imaginable.

This isn't a slam on buyers or vendors. Buyers who want better deals will hire contract negotiators who know what they're doing. They'll get better deals, cheaper prices and licenses that, where possible, more closely align with the customer's business interests (oh, and they'll anticipate things like future M&A work, too).

But it's unreasonable to expect vendors to license software the way every customer wants it - it's just not possible. But customer's do have choices - they can find other vendors.