Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

Published on February 23, 2009 by R "Ray" Wang

Almost every inquiry over the past 3 months has ended up with at least one question about what vendors are doing to help their clients amidst an economic recession.  As blogged in the October 12, 2008 posting on “5 Steps to Restoring Trust in the Vendor – Customer Relationship” the issue of credibility and trust remains at the forefront of today’s concerns.  So over the past 3 weeks, I’ve posed a question to 47 of my friends on the other side of the aisle, “What are you doing to make it easier?”  I also put a quick tweet out this past Saturday that got some great responses.   To protect the brave who shared with me their views and mask the software vendors they represent (when the program is not public), let me share with you the five major themes/programs in order of most frequent first:

  • Create better peer forums to share information (45/47). Almost every vendor surveyed has a program to improve the online support capabilities.  User generated content in peer forums tops the list of initiatives.  Other plans focus on sharing data on benchmarks, operational metrics, and best practices.
  • Renegotiate existing terms (23/47). Some vendors are helping clients meet the realities of the current market conditions. Big on the list is helping clients address shelf ware without repricing of contracts.  For clients who paid full maintenance on software that’s at least 4 years old, some vendors are offering to reduce up to 20% of the overall licenses not in use.  This leads to lower maintenance revenue but engenders good will among key clients.  Further, several vendors have allowed clients to apply credit towards another module as an alternative.
  • Offer more entry points to support options (17/47). The three pillars of software maintenance and support policies still apply.  However, several vendors are now offering more tiers of support as lower entry points.  Two vendors have finalized plans to offer just the bare bones legal and regulatory updates.  Other vendors have made it easier to come back with maintenance amnesty plans.
  • Assist with vendor financing (13/47). Clients seek access to financing, especially many in the mid-market who’s credit lines have been zapped.  Microsoft has led the charge by providing 0% financing for its Microsoft Dynamics ERP and Microsoft Dynamics CRM Customers.  Other vendors such as IBM, Infor, Oracle, SAP, Sage also offer vendor led financing programs that include hardware, implementation, training, and other services.
  • Lower cost of usage and ownership (5/47). Though tops on the list as a conceptual practice, most vendors will need to roll out such initiatives over the next 24 months.  A few notable exceptions include Agresso with its VITA architecture which allows customers to rapidly make business and UI changes, Microsoft Dynamics customers who report back significantly lowered implementation and training costs compared to most vendors, and Epicor customers who report significant productivity gains with Service Connect and the EPM analytics in its new Epicor 9 release.

The bottom line.

The good news is that some vendors have been listening to their customers about what they need and have put the motions in place to do the right thing.  However, the bad news -we still hear from many customers about vendors behaving badly by blocking access to third party contract negotiation support, third party maintenance, and training on products.  For those vendors who have taken a hard line on any or most of these programs, your customers know who you are and shame on you!  More on access to training in a future post!

Your POV.

If you’re a client, what’s missing?  As a vendor what steps have you taken to address this issue? Will you be able to convince your board and management to make the requisite changes.  Post a comment or drop me a line at rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

  • [...] SaaS, subscription pricing, 3PM, and the economy provide a confluence of forces that will continue to attack maintenance revenue streams.  Many legal cases have been fought over this issue including IBM vs Amdahl and Geac vs Grace Consulting.  SAP’s failed attempt to convince customers on the value of Enterprise Support led to a public relations disaster and a factor in the resignation of their CEO.  The result – many vendors considering price hikes held back.  In fact, some savvy software vendors retooled and restored the client -vendor relationship by: [...]

  • Hey Software Insider! My Dynamics sales rep helped us with our upgrade to AX 5.0 and got us the zero percent financing. He also helped convert licenses in GP to AX. TTFN. Missy

  • We can’t get SAP to budge on this Enterprise Support nonsense and our Oracle rep wants to reprice our database licenses if we take 100 off shelfware. WTF!

    Dave

  • Ray, we just got out of a negotiation with several vendors. One of them helped us with a 0% financing offer as well as helped us take existing licenses and apply them to a newer product. The other slashed our maintenance costs in half for a 10 year commitment. There are some great vendors out there who understand relationship.

    Tito

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