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:
- Selection
- Implementation
- Utilization
- Maintenance
- 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 Rights
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.
- What rights should be added?
- What rights should be updated?
- 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.
