Monday’s Musings: Call to Action – Updating The Enterprise Software Licensee’s Bill of Rights

Published on December 15, 2008 by R "Ray" Wang

Software Ownership Remains Unusual, Onerous, and Restrictive

Software licenses are truly unique.  Licensee’s can not resell, reuse, or share their licenses with others. For example, enterprises easily reuse, resell, or share tangible assets such as hardware, telecom equipment, and storage. From both a replacement and life-cycle perspective, leases for assets such as telecom equipment incorporate a clear endpoint. However, enterprise software often may not be “owned,” “shared”, or “disposed of”.  Often its use creates dependencies that cannot be easily remediated at the end of the license term or useful life.  In fact, customers of software vendors are known as users and the term is apt when one thinks about the dependencies software vendors promulgate on their customers.  The bottom line – ownership is quite restrictive.

Contracts Should Be Aligned To Five Phases Of How Enterprises Really Use Software

Over 3 years ago, several of our top clients had cornered us in the bar at one of our events and challenged us to provide a long term apps strategy framework to help them navigate through a very restrictive contract negotiation.  The engagements provided the catalyst to create a reusable contract negotiation model based on end user experiences in the software ownership lifecycle.  The key foundation included 5 key phases:

  1. Selection
  2. Implementation
  3. Utilization
  4. Maintenance
  5. Retirement

An Enterprise Software Licensee’s Bill Of Rights Gives Users A Platform to Build a Win-Win Client Vendor Relationship

Given the complexity that users faced, experiences from 250 client advisory, inquiries, and face to face discussions were applied towards the productization of IP into syndicated research. On December 18, 2006, we released 36 user rights in a report titled  “An Enterprise Software Licensee’s Bill of Rights” (see Figure 1.) Expanding on these 36 rights, we then battle tested the Enterprise Software Licensee Bill of Rights with 12 vendors (i.e. Agresso, Deltek, Epicor Software, IFS, Infor, Lawson, Microsoft, Oracle, QAD, Sage Software, SAP, and Sterling Commerce) across 97 criteria in the industry’s only policy based evaluation – The Forrester WaveTM: Enterprise Apps Software Licensing And Pricing, Q4 2007, released October 15. 2007. During the evaluation, we were pleasantly surprised to find that most vendors were open to this idea of a mutually agreeable bill of rights.  In fact, many commented that this was the upfront communication needed to create a win-win relationship.

Figure 1.  An Enterprise Software Licensee’s Bill of Rightseslbor

Call To Action Starts Today – Contribute Your Ideas To V 2.0!

Now with the experience of over 800 client engagements, inquiries, and face to face discussions, it’s time to update the Bill of Rights to reflect changes in today’s environment.  Some disruptive forces now include:

  • Virtualization
  • SaaS and subscription pricing
  • Vendor consolidation and reduced competition in some market segments
  • Open source
  • Newer usage based pricing models

So based on some key market changes, here’s my challenge to you.

  1. What rights should be added?
  2. What rights should be updated?
  3. What rights should be retired?

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

Post your suggestions or send me a private email to rwang0@gmail.com.  Posts are preferred!  For every good idea or comment, whether or not we use your idea, we’ll send you a copy of the final report.  Let’s put the collective wisdom of the web to work and help our end user clients create a fair win-win playing field with the vendors.  We’ll be publishing the official update late Q1 2009.  Thanks and look forward to your input!

Copyright © 2008 R Wang. All rights reserved.

  • Hello Ray,

    I did provide a post on the Procurement Professional Website, but wanted to send you an e-mail as well. I am very interested to see the official update. You can either e-mail me or send me a hard copy of the final results.

    With regards to Open Source Software (“OSS”) I would like to see definitions for :
    – Copyleft
    – Tivoization
    – Four Freedoms
    – Viral OSS

    Additionally…what is the key GPL restriction for OSS.

    Edith Rodriguez

    Sourcing Manager

    Purchasing

    ARUP Laboratories

    500 Chipeta Way

    Salt Lake City, Ut 84108-1221

    Direct: 801-584-5067

    Toll Free: 800.242.2787

    E-mail: edith.rodriguez@aruplab.com

    http://www.arupplab.com

  • Ray, I was able to sell Microsoft office licenses via Used Software in Germany. When you put out the 1st bill of rights, you mentioned that you thought #36 was not possible. It is now!

  • Picking up on Ashok’s comment, I am concerned about the higher level of vendor lock-in for SaaS providers. There is no option to go “off maintenance” and continue to run the software. Therefore, with SaaS providers that offer an on-premise version (e.g. Oracle On-Demand), there should be conversion terms to transition to the on-premise version.

    For SaaS providers that do not offer an on-premise deployment option (e.g. Salesforce.com), there needs to be the right to extract all master file and transactional data to an open format (e.g. XML), so as to facilitate conversion to a new SaaS or on-premise solution.

  • With SaaS, we need to have some rules on ownership of data. I’m including metadata, process data, etc. It’s useless having just the data with no context. You may want to think about how to address this. BTW, thanks for all your help with my Oracle ELA last year. Appreciate it! – AG

  • Hey Ray! hope all’s well. We met at Sapphire 2008 and thanks for your advice. One of the big developments in Germany is the right to buy remarketed software. I think that should be a right as well to be included. You might want to take a look at this market. I’ll DM you later.

    Helena

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