It seems in a number of my recent conversations with a major software publisher (who has one of the most complex licensing structures going)...that they keep referencing companies that "Game the System" and what a wrong thing that is to do.
Question - when they make the rules, can you really ever "Game the System"? Don't get me wrong, we specialize in helping customers get creative with how to reduce their licensing costs for their software...but if it's allowed within their convoluted licensing terms, how can you be doing anything wrong?
Take the IRS for example (since it's April 15th), their rules are complex (far more complex than any software publisher) but they expect you to take advantage of every credit that you are entitled to through their rules. They don't call foul and say you're "Gaming the System" when you take advantage of rules that work in your favor. Why should a software publisher?
LOL - yes, I did just compare this software publisher to the IRS...LOL!
Frankly, the ones who write the rules hold the cards - if you can work within those rules and minimize your costs, who are they to complain? If they don't like it, they can change their rules.
What do you think...is it possible to "Game the System" in a negative way?
Showing posts with label IT costs. Show all posts
Showing posts with label IT costs. Show all posts
Thursday, April 15, 2010
Wednesday, March 10, 2010
Resellers and Publishers in the world of Software License Management
I woke up this morning to a great Twitter from a good friend and great coach Jak Plihal (http://www.beingsolutions.com/). It was the quote:
"It is hard to get a man to understand something, if his living depends on him not understanding it." by Upton Sinclair.
To me, this perfectly explains the relationship between resellers (VARs, LARs, and any other acronym that is responsible for selling you software), software publishers and the details of software licensing.
There are details in software licensing agreements and product use rights that can be turned to a benefit for a company in legally reducing their software licensing costs...but you're not going to find them all out by asking your reseller or publisher for help.
Why? Not because they are necessarily trying to mislead you or keep you in ignorance - instead it's because they honestly don't even think of those options...because their living (or magnitude of it) depends on them not thinking of those options.
Now, there are definitely some that are better than others (I love working with Softmart for example as their reps have demonstrated to me a strong ability to keep the customer's needs in focus) but as long as their income relies upon what you buy then Upton Sinclair's quote will continue to apply.
When it comes to negotiating the best deal for licensing - the bulk of the savings opportunities comes from making full use of the product use rights and volume licensing agreements terms - not from the discount you negotiate (or not from the discount you negotiate without knowing these items intimately). Get your advice and education from an independent expert...know in advance who profits from your purchase and what their motivation is so you can better analyze their advice.
Remember, "It is hard to get a man to understand something, if his living depends on him not understanding it." Upton Sinclair.
Thanks Jak!
"It is hard to get a man to understand something, if his living depends on him not understanding it." by Upton Sinclair.
To me, this perfectly explains the relationship between resellers (VARs, LARs, and any other acronym that is responsible for selling you software), software publishers and the details of software licensing.
There are details in software licensing agreements and product use rights that can be turned to a benefit for a company in legally reducing their software licensing costs...but you're not going to find them all out by asking your reseller or publisher for help.
Why? Not because they are necessarily trying to mislead you or keep you in ignorance - instead it's because they honestly don't even think of those options...because their living (or magnitude of it) depends on them not thinking of those options.
Now, there are definitely some that are better than others (I love working with Softmart for example as their reps have demonstrated to me a strong ability to keep the customer's needs in focus) but as long as their income relies upon what you buy then Upton Sinclair's quote will continue to apply.
When it comes to negotiating the best deal for licensing - the bulk of the savings opportunities comes from making full use of the product use rights and volume licensing agreements terms - not from the discount you negotiate (or not from the discount you negotiate without knowing these items intimately). Get your advice and education from an independent expert...know in advance who profits from your purchase and what their motivation is so you can better analyze their advice.
Remember, "It is hard to get a man to understand something, if his living depends on him not understanding it." Upton Sinclair.
Thanks Jak!
Thursday, September 03, 2009
Practical Advice to Reduce the Cost of Your Software Spend
It is not uncommon for software licensing and maintenance to be the 1st or 2nd largest budget line item for a company, so for all those companies getting ready to go into their budgeting cycle during this tough economy...reducing that number is going to be key to getting budgets approved and getting other key IT projects into the budget.
Here are some practical steps to reducing the cost of your software spend:
Here are some practical steps to reducing the cost of your software spend:
- Get informed - What software contracts do you have, when do they renew, what soft costs are included in the price tag, who's using the software and why?
- Clean house - Get rid of items not being used or consolidate where two products cover the same functionality (particularly key in IT management software). Focus on products you're still paying for, not those that aren't costing you any licensing fees currently.
- Research - For your software contracts, when is the publisher's year end (and by default their quarter ends)? Same thing for your reseller. Can you modify any of your contracts to fit those time periods? What would you want in exchange for making these modifications? What new technology are you implementing this year? Does that tie into any of your publishers "hot new products"?
- Examine all software maintenance contracts - Is maintenance mandatory or optional, what value have you received from maintenance to date, what is the roadmap for that product for the future and does it fit the timeline of your maintenance fees, are you fully leveraging what you've already spent?
- Evaluate your software reseller - How many resellers are you using? (If multiple, consider consolidation - and ask for increased savings in return.) How are they performing? What value are they bringing to the table for you? How dialed in are they to the publishers, their product use rights, incentives, licensing programs, roadmaps?
- Ask for help - Throw a challenge to your resellers and the publishers, have a clear picture of what you want as the outcome and ask for their help in reaching that outcome. Do this early in the game, it doesn't matter if your contract isn't up until next August - is there a significant financial benefit to renewing in December, May, June?
- Negotiate, Negotiate, Negotiate - Everyone is hurting in this market which means deals will be made. Play fair, recognize that everyone needs to make a profit to survive but make sure that profit includes your company.
This takes some leg work, it takes some investment of time and it takes some creativity but the payoffs are there. Alternatively, ask for help.
Thursday, July 16, 2009
Software Asset Management, Common Sense and Saving Money
Have you ever noticed how cyclical everything seems to be in this world? Well, one of the cycles I've watched since the early 1990's has been Software Asset Management.
The cycle (at least in the US, I frankly didn't track it much internationally) seems to be: Avoiding the topic, Awareness of an issue, Deciding to do something about the problem, Doing a full fledged project, Pairing that project down, Letting nature take care of itself and then the cycle starts again.
Obviously there may be some missing stages and some more "refined" terms than those I used but the basic concept is the same. When times are lush we seem to get into this phase where we feel the need to do a full bore SAM methodology but as soon as money and resources get tight we abandon the methodology in favor of "just making due".
This topic has been reinforced to me lately through two things: (1) a brand new client who emphasized the desire to have a "ala carte" proposal for SAM implementation - our existing clients know that providing options is the ONLY way we work, and (2) reading a fellow SAM practioner's (Kylie Fowler) blog which focuses on the "practical" side of ITAM and SAM (check it out...some great information).
In all our methodologies, let's not loose sight of the basic concept here...SAM is supposed to save money, manage risk and provide the business with the technology tools needed to be competitive. None of this requires complexity, extraordinary costs and it should all fit easily into common sense business practices.
If you're finding yourself ignoring your SAM methodology to run your business, do a quick re-evaluation of the methodology. What is valuable and what is just extra work? Streamline it, modify it, replace it with something simpler...do what you have to do, but don't abandon or ignore it altogether as you'll then be doomed to repeat the cycle (losing out on all those great cost savings and risk management in the meantime!).
If this is still too much for your business right now - consider outsourcing your SAM. We do this for a number of clients and they've found that (a) our costs are ridiculously low compared to in=house, (b) we typically save them more than our annual fee in increased savings, and (c) it frees their staff up to focus on running the business. Talk to me if this is of interest to you.
The cycle (at least in the US, I frankly didn't track it much internationally) seems to be: Avoiding the topic, Awareness of an issue, Deciding to do something about the problem, Doing a full fledged project, Pairing that project down, Letting nature take care of itself and then the cycle starts again.
Obviously there may be some missing stages and some more "refined" terms than those I used but the basic concept is the same. When times are lush we seem to get into this phase where we feel the need to do a full bore SAM methodology but as soon as money and resources get tight we abandon the methodology in favor of "just making due".
This topic has been reinforced to me lately through two things: (1) a brand new client who emphasized the desire to have a "ala carte" proposal for SAM implementation - our existing clients know that providing options is the ONLY way we work, and (2) reading a fellow SAM practioner's (Kylie Fowler) blog which focuses on the "practical" side of ITAM and SAM (check it out...some great information).
In all our methodologies, let's not loose sight of the basic concept here...SAM is supposed to save money, manage risk and provide the business with the technology tools needed to be competitive. None of this requires complexity, extraordinary costs and it should all fit easily into common sense business practices.
If you're finding yourself ignoring your SAM methodology to run your business, do a quick re-evaluation of the methodology. What is valuable and what is just extra work? Streamline it, modify it, replace it with something simpler...do what you have to do, but don't abandon or ignore it altogether as you'll then be doomed to repeat the cycle (losing out on all those great cost savings and risk management in the meantime!).
If this is still too much for your business right now - consider outsourcing your SAM. We do this for a number of clients and they've found that (a) our costs are ridiculously low compared to in=house, (b) we typically save them more than our annual fee in increased savings, and (c) it frees their staff up to focus on running the business. Talk to me if this is of interest to you.
Sunday, February 22, 2009
Software Licensing - What You Don't Know Can Cost You!
I was having a conversation with a gentleman on Friday night at a business mixer and discovered that he was an IT infrastructure consultant advising a fairly large size enterprise on a new structure to support their very distributed user-base.
During the conversation he mentioned his surprise at the amount of money it was going to cost his client to implement Microsoft Office 2007 for their 7500 users. We talked a little more as I wanted to understand what program the company was considering purchasing through - and I found out that they had formerly had Software Assurance but it had expired almost 2 years ago. What this consultant didn't know (and neither did his client and no one else was bothering to point it out) is that Office 2007 was released to the general public on 1/27/2007 and (don't quote me on this date) was available to their volume licensing customers around October 2006. Software Assurance entitles you to the latest version of the software released as of your expiration date - whether you've installed it or not. That is in perpetuity (for traditional licensing).
The result being, that was $2m the client was going to spend for software they were already licensed for! I told the consultant to go back to the client and have them review their licensing statement of the Microsoft Volume Licensing web site to make sure dates were good but that it looked like that was money they could keep in the bank (and to hire us in to review the rest of their licensing plans to avoid any other costly mistakes).
This is an area where we frequently find clients uninformed or misinformed. Talk to an unbiased licensing professional before making a software investment - what you don't know can cost you a lot of money!
During the conversation he mentioned his surprise at the amount of money it was going to cost his client to implement Microsoft Office 2007 for their 7500 users. We talked a little more as I wanted to understand what program the company was considering purchasing through - and I found out that they had formerly had Software Assurance but it had expired almost 2 years ago. What this consultant didn't know (and neither did his client and no one else was bothering to point it out) is that Office 2007 was released to the general public on 1/27/2007 and (don't quote me on this date) was available to their volume licensing customers around October 2006. Software Assurance entitles you to the latest version of the software released as of your expiration date - whether you've installed it or not. That is in perpetuity (for traditional licensing).
The result being, that was $2m the client was going to spend for software they were already licensed for! I told the consultant to go back to the client and have them review their licensing statement of the Microsoft Volume Licensing web site to make sure dates were good but that it looked like that was money they could keep in the bank (and to hire us in to review the rest of their licensing plans to avoid any other costly mistakes).
This is an area where we frequently find clients uninformed or misinformed. Talk to an unbiased licensing professional before making a software investment - what you don't know can cost you a lot of money!
Tuesday, April 08, 2008
Realistic IT Budget Cuts and Finding More Money...
Business...it's so cyclical. We go through lush years when the primary focus is just "getting things done" and we grow fat, then we hit a slow down and we suddenly have to watch our dollars and the primary focus becomes "get it done...but don't spend any money" and we are forced on a diet.
Unfortunately, in the directive to cut costs - we don't always do it in the best fashion. There are costs you can cut in your IT budget without impacting service - they never should have been there in the first place...they came from lack of time and desire for convenience.
Where to look:
1) Software licensing agreements and maintenance plans
2) Telecommunications costs
3) Outsourcing agreements
If you don't have the talent in-house to do this, hire it out.
A reputable consultant will be able to tell you after a quick look if there is money to be saved - so you should know without incurring costs (or possibly very minimal costs) to what magnitude your savings opportunities are - they should full justify the cost of the consultant plus significant savings to your organization.
Additionally - there is money on the table when you are signing or renewing a deal. Make sure you're working with an expert who knows how to get you the most from your negotiations.
Don't wait until your budget is due to start this process...get a jump start and get it done now - you know budget time is always a crunch...
Unfortunately, in the directive to cut costs - we don't always do it in the best fashion. There are costs you can cut in your IT budget without impacting service - they never should have been there in the first place...they came from lack of time and desire for convenience.
Where to look:
1) Software licensing agreements and maintenance plans
2) Telecommunications costs
3) Outsourcing agreements
If you don't have the talent in-house to do this, hire it out.
A reputable consultant will be able to tell you after a quick look if there is money to be saved - so you should know without incurring costs (or possibly very minimal costs) to what magnitude your savings opportunities are - they should full justify the cost of the consultant plus significant savings to your organization.
Additionally - there is money on the table when you are signing or renewing a deal. Make sure you're working with an expert who knows how to get you the most from your negotiations.
Don't wait until your budget is due to start this process...get a jump start and get it done now - you know budget time is always a crunch...
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