Tuesday’s Tip: Software Licensing and Pricing – Stop paying for shelfware

Published on September 30, 2008 by R "Ray" Wang

First of all, some of you may be wondering what shelf-ware is so a quick definition.  It’s software you buy and don’t use.  So if you bought 1000 licenses of Vendor X’s latest ERP software and use 905 licenses, you now have 95 licenses not being utilized.  That’s 95 licenses of shelfware you pay maintenance on whether or not you use the software or not.

To avoid paying for shelf ware you have to do a few things:

  1. Conduct an internal software audit. Figure out how much software you have and are using.
  2. Look at your contract to see if you can reduce shelf ware. Vendors are smarter than clients in most cases.  You might just find a clause that says any return of software subjects you to repricing of the contract.  There are a number of similar clauses like this.
  3. Determine future demand. Find out if you will use the software in the next 3 months.  If you have a demand, then it doesn’t make sense to return.
  4. Consider price protection. Arranging for future discounted prices helps with reducing shelfware and paying maintenance on software not deployed.  These clauses are a good way forward

Your POV

I’m in the process of updating the Enterprise Software Licensee Bill of Rights.  If you’ve got an idea or suggestion to share, please comment or send a private email to rwang0@gmail.com.  If I use it, I’ll send you the updated version.  Look forward to hearing your thoughts!

(Added 3/5/2009) Take the new poll on what rights should be in the 2009 Enterprise Software Licensee Bill of Rights!

Copyright © 2008 R Wang. All rights reserved.

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