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Published on April 28, 2010 by R "Ray" Wang

Welcome To The First Of A Series Of Posts On Microsoft Licensing Updates. Buy evista no prescription, Given the vast array of Microsoft products and licensing categories, an organization may often feel overwhelmed by Microsoft's policies.  While there may be some complexity, these series of posts are designed to provide up to date commentary and analysis on new programs as they become available.

Product And Program News


  • Price Increase For Office Professional Plus 2010. What is it?:  Microsoft increases Office Professional Plus 2010 by 5%.  Who's impacted?: Customers with Professional Desktop and Professional Desktop with Microsoft Desktop Optimization Pack (MDOP) pricing.  Suite pricing increases between 3 and 4%.  When's it effective?: This program begins May 1st, buy generic iressa, 2010.

    Point Of View (POV): The recent price increase may be the result of revenue capture for new features in Communicator, New Hampshire NH N.H., Infopath, and Sharepoint Workspace.  The good news - Office Professional Plus 2010 includes the additional features of Office Enterprise 2007.  The current Office Professional Plus list price with the price increase is still lower than the list price of Office Enterprise 2007.  For those who paid less than list for Office Enterprise 2007, they should look at other VLP programs for bundling discounts to offset this price increase.




  • Microsoft Business Productivity Online Suite (BPOS) Goes Global, Montana MT Mont.. What is it?: 17 new markets and 39 countries and regions gain BPOS.  BPOS includes E-mail and calendar, Discount iressa, email coexistence and migration tools, document collaboration and workspaces, web conferencing, epogen online kopen, Microsoft Online Services Administration Center, Zometa farmacia a buon mercato, and Microsoft Online Services Sign In Application. Who's eligible?: All customers. When's it effective?: This program starts April 14, 2010.

    POV: The new offering shows Microsoft's commitment to pushing out its Cloud initiatives.  At Microsoft Convergence, Stephen Elop stated that more than 90% of R&D will be focused on cloud services.  Customers on BPOS-D gain Office Communications Online, Arkansas AR Ark., giving them Voice capabilities in the cloud.




  • Academic Volume Licensing Programs Gain Electronic Software Distribution (ESD). Tennessee TN Tenn., What is it?: Customers can download software over the Internet. Who's eligible?: Customers on Campus and School Agreement (CASA) with Faculty and Staff at Home rights or  Student Option; and Select License/Select Plus for Academic with Faculty and Staff Work at Home rights or Student Select and Student Select Plus.  When's it effective?: North America and EMEA customers gain ESD now.  Latin America expected in May 2010.  APAC estimated date is Q1 FY11.

    POV: Eligible customers should take advantage of this program to avoid the headaches of managing physical software delivery.  Customers can also benefit from the tax free provisions of Internet distribution of software.




  • Microsoft GeoSynth Launch. What is it?: The off-line version of the PhotoSynth platform will be available in a subscription based pricing format for Specialty Server configuration based on users and a single-user desktop version. Who's eligible?:  Customers on Volume Licensing programs for Campus and School Agreements, Enterprise Agreements, Open Value, cheapest gleevec price, Open Value Subscription, Billig evista apotek, Select Agreements, and US Government. When's it effective?: This program starts May 1, 2010.

    POV: The subscription pricing program makes sense for users testing out the off line product.  Longer term, αγοράζουν φτηνά gleevec, institutional customers may want to seek other pricing options such as perpetual license, Buy gleevec without prescription, perpetual license with upgrade rights, and enterprise agreements.



Microsoft Promotions Update

The following are new promotions that have been introduced


  • Windows HPC Server 2008 Promotion. What is it?: customers who purchase Windows Server HPC Edition operation system server license and Software Assurance (SA) packs can save up to 25%.  Who's eligible?: customers must be on Open License, Open Value, Select License, Select Plus, and Enterprise Agreements.  When's it effective?: April 1, 2010 to June 20, 2010.

    POV: Microsoft's been beefing up its maintenance programs.  Today's SA packs include more than upgrade rights.  Services range from cold back ups for disaster recovery, home use programs, E-learning, new version rights, to spread payments.   Microsoft does not require SA with purchase.  Customers who seek maintenance should assess their business requirements first and then determine what features and packs within SA to select.  Make sure you only buy maintenance for what you need.



The following promotions are now extended past June 30, 2010:

  • Open Value Subscription Expanded Up to Date.  What is it?: Upgrade to Microsoft Office 2010 or Windows 7 for customers who sign a new Open Value Subscription or Open Value Subscription for Government agreement.  Who's eligible?: The Open Value Subscription program up-to-date promotion for existing desktop platform licenses of current (N) and previous (N-1) versions has been expanded to include N-2 versions: Microsoft Office Professional XP, Microsoft Office Small Business XP, and Microsoft Office Standard XP, buy evista no prescription. When's it effective?: Available now - the licenses launched worldwide in January 2010, φτηνές φαρμακείο capecitabine.

    POV: If there's a compelling need to move to Office 2010 and Windows 7 and an Open Value Subscription is on the table, Kjøp Discount gleevec, this represents a good incentive to upgrade to Microsoft Office 2010.




  • Rental Rights. What is it?: Rights for organizations to rent, lease, order epogen online legally, or outsource PC's to third parties with qualifying Windows operating system or Microsoft Office system software.  Who's eligible?: Open License, Cheap zometa online without prescription, Select License, and Select Plus customers.   When's it effective?: The program is effective from now till June 30th, farmacia gleevec barato, 2010.

    POV: Based on current license rights, Maine ME Me., office equipment leasing companies, PC leasing companies and other businesses which provide PCs to operators of hotel and airport kiosks, internet cafés, Massachusetts MA Mass., and business centers, Oregon OR Ore., can not rent, lease or outsource the Microsoft software on the PCs to end users.  Microsoft began a program in January 2010 to offer these rental, leasing, cheap capecitabine online cheap, and outsourcing rights for these businesses.  The program modifies the licensing rights for this type of third party end user situation.  The rights are provided through a one-time license transaction.  The rights are non-transferable and endure for the term of the underlying software license or life of the hardware they are attached to.



The following promotion is now extended past September 30, Buy arimidex without prescription, 2010:

  • Forefront Online Protection for Exchange. What is it?: Customers can receive up to a 30 percent savings on Forefront Online Protection for Exchange per-device and per-user monthly subscription licenses.  Who's eligible? Buy evista no prescription, :  Open Value, Microsoft Open Value Subscription, Microsoft Select License, Microsoft Select Plus, Microsoft Enterprise Agreement, Microsoft Enterprise Subscription Agreement, Microsoft Campus Agreement, and Microsoft School Agreement customers.   When's it effective?: The program is effective from now till September  30th, 2010.

    POV: Microsoft continues to seek additional revenue sources via its Microsoft Online Services division, where to buy cheap casodex. This offer makes sense for customers who are looking for a hosted solution to protect from spam, Comprare epogen sconto, to catch phishing scams, to enforce policies, and to deliver disaster recovery.  While other services may be more comprehensive, cheap arimidex online cheap, Forefront Online Protection provides a suite approach to a common problem with Exchange.



The following are promotions ending on April 30th, 2010:

  • Microsoft Office System Software Assurance Renewal. What is it?:  Discounts on SA renewals for Microsoft Office Enterprise 2007, Microsoft Office Professional Plus 2007, Microsoft Office Standard 2007, and the Microsoft Professional Desktop Platform.  Who's eligible?: Open Value, Select License, and Select Plus customers. When's it effective?: This program ends April 30th.

    POV:     Microsoft's been beefing up its maintenance programs.  Today's SA packs include more than upgrade rights.  Services range from cold back ups for disaster recovery, home use programs, E-learning, new version rights, to spread payments.   Microsoft does not require SA with purchase.  Customers who seek maintenance should assess their business requirements first and then determine what features and packs within SA to select.  Make sure you only buy maintenance for what you need.



  • Windows 7 Professional Upgrade, buy evista no prescription. What is it?: Upgrades to Windows 7 Professional operating system—with or without Microsoft Software Assurance for Volume Licensing—and Windows 7 Professional with the Microsoft Desktop Optimization Pack (MDOP) for Software Assurance upgrade licenses when acquired with Software Assurance (at full price).   Who's eligible?:  Open License, Open Value, Select License, and Select Plus customers with qualifying Windows desktop operating system licenses.  When's it effective?: This program ends April 30th.

    POV: This program should be considered for those who paid full price for SA in order to capture full ROI on existing agreements



The Bottom Line For The Customer - A Good Navigator Can Demystify The Complexity In Microsoft Licensing

Though Microsoft continues to make strides in simplifying its software licensing policies, massive adoption by all parts of an organization often require greater coordination and up to date information.  Customers gain time to value when working with an expert who has both an understanding of Microsoft's product strategy and licensing practices.  Software contract negotiations must tie back to both organizational and application strategy.

Your POV

What do you think of Microsoft's recent promotions?  Are you challenged trying to manage your Microsoft Licenses. Do you find the licensing too simple or too complex?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your overall apps strategy and contract negotiations strategy.  Here’s how we can help:


  • Demystifying Microsoft licensing

  • Assessing SaaS and cloud

  • Evaluating Cloud integration strategies

  • Assisting with legacy ERP migration

  • Planning upgrades and migration

  • Performing vendor selection

  • Providing contract negotiations and software licensing support


Related resources and links
20100606 Software Insider – R “Ray” Wang “News Analysis: Microsoft Licensing Update – May/June 2010″

20100222 Monday’s Musings: Why Users Should Preserve Their Third Party Maintenance Rights

20091008 Deal Architect – Vinnie Mirchandani “Third Party Maintenance Is Really 4 Decades Old”

20071120 News Analysis: Too Early to Call the Death of Third Party Maintenance

20090210 Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

Buy evista no prescription, 20090709 Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts.

20090622 News Analysis: Infor Flex Reflects Proactive Maintenance Policy

20090516 News Analysis: Rimini Street Launches Third Party Maintenance for SAP

20090504 News Analysis: Oracle Waives Fees On Extended Support Offerings

20080909 Trends: What Customers Want From Maintenance And Support

20080215 Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

20090428 News Analysis: SAP and SUGEN Make Progress on Enterprise Support

20090405 Monday’s Musings: Total Account Value, True Cost of Ownership, And Software Vendor Business Models

20090330 Monday’s Musings: It’s The Relationship, Stupid. (Part 2) – Stop Slashing The Quality Of Support And Maintenance

20090324 Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

20090223 Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

20081012 Monday’s Musings: 5 Steps to Restoring Trust in the Vendor – Customer Relationship

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090912 News Analysis: Siemens Cancels SAP Maintenance Contract

20090910 Tuesday’s Tip: Note To Self – Start Renegotiating Your Q4 Software Maintenance Contracts Now.


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

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Vendor Event: Soft Summit 2009

Published on September 5, 2009 by R "Ray" Wang
Soft Summit 2009 Title: Vendor Event: Soft Summit Location: The Sheraton Palace Hotel, San Francisco, CA Link out: Click here Start Date: 2009-10-21 Start Date: 2009-10-22 Description: What is SoftSummit? Agility and Insight. Profitability Today! "SoftSummit has a great mix of practitioners, looking at licensing from an end-user and a vendor perspective and has a great deal of depth looking at these issues." SoftSummit 2009 is unlike any other conference you'll attend this year. It's the only conference that takes a laser-like look at licensing and entitlement technologies and the intersection between producers and the enterprises that manage and use their solutions. This year, more than ever, expect to be challenged, informed, and inspired to: * Navigate emerging licensing trends and issues * Drive fast ROI with practical techniques and best practices * Maximize efficiencies throughout the licensing and entitlement continuum * Achieve the profitability you want today SoftSummit offers common ground where peers and colleagues from software producers, device manufacturers, and enterprise IT come together to learn, discuss, network and brainstorm. SoftSummit 2009. It's time to join the conversation and the experience. Register

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Poll/Survey: It’s Time To Update The Enterprise Software Licensee Bill of Rights!

Published on March 5, 2009 by R "Ray" Wang
Now's The Time To Assert Your Rights With the market now in favor of the enterprise software licensee, its now time to update the Enterprise Software Licensee's Bill of Rights to include newer topics such as virtualization, SaaS and subscription pricing, newer usage based pricing models, open source, and vendor lock-in avoidance.  As mentioned in a call to action in a December 2008 Monday's Musings, this groundbreaking report, originally published in December 2006, will be updated to reflect current market conditions.  The goal - improve this reusable contract negotiation model that cuts across the 5 key phases of the software ownership life cycle:
  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
[caption id="attachment_1195" align="aligncenter" width="600" caption="December 2006 Enterprise Software Licensee's Bill of Rights"]eslbor[/caption]
Your POV 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?
Take the new poll on what rights should be included in the 2009 Enterprise Software Licensee Bill of Rights or send me a private email to rwang0 at gmail dot 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 in Q2 2009.  Thanks and look forward to your input! Copyright © 2009 R Wang. All rights reserved.

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Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

Published on February 10, 2009 by R "Ray" Wang
In several contract negotiation support calls this month, clients have discovered interesting language in their contracts designed to prevent them from choosing a third party maintenance option.  The language is often buried deep into the legalese and many unsuspecting clients may sign without understanding the future implications in the software ownership life cycle and the Software Licensee Bill of Rights . Here's three modified examples with both the client's name and the vendor's name masked to protect both the innocent and guilty:
  1. "Licensee confirms that maintenance will be provided by VENDOR X and only authorized and certified individuals may make modifications to the software code. "
  2. "Except as otherwise expressly set out herein or as otherwise expressly permitted by law, Licensee may not: (d) reverse assemble, reverse compile, or otherwise reverse engineer, de-compile , or disassemble the whole or any part of the VENDOR Y's Program or the Documentation or permit a retained Third Party or any other part to do so without VENDOR Y's express written consent.  This includes for purposes of maintaining the software"
  3. "Licensee hereby confirms as per the effective date of the schedule licensee has obtained all licenses for the license solutions and only the support/and or maintenance services received by licensee for SOFTWARE PROGRAM NAME Z are VENDOR Z'S including other support maintenance services provided by and separately priced and charged for VENDOR Z which are in addition to VENDOR Z'S"
Not knowing what that legal gobbledygook meant, one of our clients sent an email seeking clarification for Example 3 and got this in response from VENDOR Z:
"This requires CLIENT 1 to confirm third party licenses to protect CLIENT 1's liability. Grants CLIENT 1 rights to use third party software. Requires company to confirm they are not receiving support services except from VENDOR Z"
Now, this could be from a rogue sales person with some legal background or part of a new program, but the clarification is clear.  Vendor Z is explicitly asking the client to sign away third party maintenance rights in example 3. (Added Feb 13, 2009:  Good news!  Without naming a vendor here, since the general publicity surrounding this issue, the client has managed to have the software vendor retract the interpretation of the above statement) Recommendations - sure its caveat emptor but talk about anti competitive! With more examples coming from other clients about other restrictive vendor practices, well in true colloquial terms, "Houston, we have a problem!"  During the current economic downturn, customers find these new "official" and "unofficial" programs to be outrageous.  In defense of the vendors, these programs protect their maintenance streams from the third party maintenance options .  While this may help their revenue stream, actions such as this, give software vendors a bad name and lessen their credibility in being a true partner for IT solutions.  In fact, vendors need to restore the vendor client trust if they plan to keep their customers by choice.  Here are a few things you can do to make sure the leverage in contracts remains on the end user side*:
  • Review your contracts with your legal team for such similar anti competitive language
  • Validate any suspicious terminology with the vendor
  • Eliminate gag rule clauses in your contracts
  • Apply the five steps to a recession proof apps strategy
  • Work with the user groups to force the issue for the need for third party maintenance
  • Consider other governmental or legislative recourse to petition for third party maintenance options
The bottom line - business process revolution and cloud computing stifled by the innovator's dilemma In fact, this whole issue of third party maintenance rights is akin to what happened in the early 80's when hardware vendors tried to keep customers from going to third party support.  At the time, many of the hardware vendors poorly invested and under funded innovation in software.  This stranglehold of maintenance dollars by many hardware players, with margins as high as 70%, delayed today's enterprise software revolution.  Once the log jam on third party maintenance was broken, users had additional funds to invest in enterprise software.  New vendors entered the market.  Today, the business process revolution is being stifled by many software vendors who were the beneficiaries of the last revolution.  In fact, these vendors also have margins as high as 80% on maintenance.  Today's new turks are the third party maintenance providers like Rimini Street and SaaS vendors waiting for this impasse to break.  While they are chipping away at the market by providing new levels of innovation at optimal price points for adoption, many of the on premise vendors have not adapted and are stalling. Until market forces change or governmental action is taken, customers must fight for third party maintenance rights and band together to reduce the overall cost of ownership. Now, in fairness to vendors, heavy upfront discounting may require higher maintenance fees on net prices to create an optimal revenue stream over the life of the product.  We do want the software vendors to reinvest in new products, remain financially viable, and of course deliver more innovation!  However, the overall process must be made transparent to customers, especially how this revenue stream is being reinvested.  Until this happens, a true partnership between the vendor and client will be quite difficult to achieve and customers will be left receiving minimal value for the maintenance they pay. In a few weeks, read up on the third party maintenance market from my colleague Paul D. Hamerman who will have a report on the Forrester website.  And please send your suggestions to the new 2009 Enterprise Software Licensee Bill of Rights. (Added 3/5/2009) Take the new poll on what rights should be in the 2009 Enterprise Software Licensee Bill of Rights! Your POV. Have you been seeing such anti-competitive behaviour in the past 3 months?  If so, send me a copy of your contract language or feel free to post here.  If you are a Forrester client, please set up an inquiry.  Post your thoughts or send me a private email to rwang0@gmail.com. (Added 3/5/2009) Take the new poll on what rights should be in the 2009 Enterprise Software Licensee Bill of Rights!
*Caveats are as follows:  1) This does not constitute legal advice.  Please consult your legal counsel for an official opinion and wording.  2) This does not consider any procurement or vendor management rules that must be applied to your enterprise.  Please work with your vendor management teams for compliance.  3)  Contract negotiation support provides insight into overall trends and price points.  Benchmarks are not provided as each user scenario is unique.
Copyright © 2009 R Wang. All rights reserved.

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Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

Published on January 27, 2009 by R "Ray" Wang
Vendors Find New Ways To Limit Access to Third Party Advisers Conversations over the past 3 months with clients about their software contracts highlight some egregious licenses practices by software vendors.  Here are some examples of gag rules that some vendors have recently attempted and successfully put into contracts:
  • Limits on third party negotiation support.  Licensees limited in their ability to discuss contractual terms with others.  On top of this, discussion of contractual details require the vendor's written permission. The impact: Legal advisers, contract specialists, and other interested third parties must obtain permission.  A vendor recently banned a licensee from working with a contract specialist citing confidentiality.
  • Restrictions on freedom of speech. One vendor had the audacity to include legal language to restrict a client vendor from disclosing details about bugs, defects, and contractual breaches with the press, peers, and user groups. The impact: Licensee prevented from working with peers and ecosystem members to resolve technical issues and compare pricing options.  In addition, the customer now lacks the proper check and balances in pressuring a vendor to deliver on promised capabilities or address severe security issues and can not go to the media as a last resort if needed.
The bottom line - take advantage of the recession to reassert your rights to work with third parties* Take the opportunity to restructure your contracts upon renewal.  Current economic conditions shift the balance of power back to the licensee and now's the time to:
  1. Retain your rights to access third party expertise in assisting with software contract reviews and overall apps strategy.
  2. Reassert your ability to freely speak to peers, third parties, and the press as needed about issues with a vendor.
  3. Pressure vendors who fail to public provide transparency about software licensee and pricing policies to begin that process.
Your POV. Has your software vendor put a gag order on your ability to seek help?  Are you working well with a vendor who has good practices?  Post your thoughts or send me a private email to rwang0@gmail.com. (Added 3/5/2009) Take the new poll on what rights should be in the 2009 Enterprise Software Licensee Bill of Rights! *Caveats are as follows:  1) This does not constitute legal advice.  Please consult your legal counsel for an official opinion and wording.  2) This does not consider any procurement or vendor management rules that must be applied to your enterprise.  Please work with your vendor management teams for compliance.  3)  Contract negotiation support provides insight into overall trends and price points.  Benchmarks are not provided as each user scenario is unique. Copyright © 2009 R Wang. All rights reserved.

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Research Summary: Five Steps To Building A Recession Proof Packaged Apps Strategy

Published on January 19, 2009 by R "Ray" Wang
FORWARD AND COMMENTARY The five steps to building a recession proof packaged apps strategy represent the sixth report in an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Aligned with operational efficiency and regulatory compliance business drivers, these best practices provide a road map for more efficient investment. Other documents as part of the series include: RESEARCH HIGHLIGHTS Introduction Enterprises continue to face tremendous change from new business models, economic crises, changing workforce dynamics, and technology advancement. The current global recession challenges enterprises to tightly align packaged apps strategies with relevant business drivers. With regulatory compliance and operational efficiency as top-of-mind concerns, enterprises must recession-proof existing strategies to achieve sustainable change, identify opportunities to make business processes more efficient, choose the most effective technology strategy, and reexamine vendor relationships. The near-term goal: Find ways to optimize existing investments in packaged apps in order to free up money to fund not only budget cuts but also potential revenue sources for innovation. Research Findings The five steps take into account business drivers, people and organizational dynamics, process optimization, technology strategy, and vendor ecosystems and relationships.
  • Step 1: Align Packaged Apps Strategy With Recession-Relevant Business Drivers. Today's key business drivers must align with regulatory compliance and achieve cost avoidance and risk mitigation.  Operational efficiency drivers attain short-term and long-term recurring cost savings.
  • Step 2: Organize The Stakeholders For Sustainable Change. Move beyond top-level executive sponsorship to create bottom-up buy-in.  Align business and IT through corporate planning and budgeting. Instill a program management discipline.
  • Step 3: Identify Opportunities In Commoditized And Differentiated Processes. Design with the end in mind. Apply process mapping to identify common processes.  Shift investments from commoditized to competitively differentiated processes.
  • Step 4: Select Effective Technology Strategies. With business drivers in hand, stakeholder alignment in place, and business processes identified, application delivery professionals can then begin work on technology strategies.  Strategies that align to both regulatory compliance and operational efficiencies include:  consolidating apps instances and deploying data archiving strategies.  Strategies that align to operational efficiencies include: optimizing upgrade planning, preparing for new deployment options such as software-as-a-service (SaaS), and incorporating upfront quality management and testing.
  • Step 5: Reexamine Your Vendor Relationship. This fifth and final step to recession-proofing an organization's existing apps strategy traditionally represents the first step app delivery pros take when making decisions about apps strategy. However, by saving this step for last, app delivery pros gain the freedom to make decisions based on business needs rather than bias toward a particular vendor or technical solution. This approach will favor vendors that deliver choice, value, and predictability in the overall relationship as well as provide greater alignment between apps strategy and business drivers.
Report Links Click on the link for the detailed report: Five Steps To Building A Recession-Proof Packaged Applications Strategy. For media courtesy requests, please send me an email to rwang@forrester.com Your POV. Would love your feedback on the report.  You can post here or send me a private email to rwang0@gmail.com. Copyright © 2009 R Wang. All rights reserved.

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Monday’s Musings: A Year of Extremes Brings Us Back Full Circle to the Beginning of the Dot.Com Bust

Published on December 29, 2008 by R "Ray" Wang
With a few days left in the year, it's hard to believe that 2008 is almost over.  Just like our paltry .401K's and lowered gas prices, it's like we reverted to the Dot Com bust.  Extreme contrasts in positions and tremendous change made 2008 both exciting, suspenseful, and frankly sobering like 2002.  In fact, it wasn't just the pace of change, it was an intensity of change like no other.  For example in the topical areas I cover:
Software vendor economics: End user enterprise apps (ERP) strategy
  • Engaging in large vendor selection projects to reducing the number of vendor suppliers
  • Building the best SOA strategy to figuring out how to justify all the investment
  • Sole sourcing from one vendor to considering purpose built apps
  • Dismissing SaaS as as fad to embracing Cloud Computing as a cost savings tool
  • Adopting standard middleware platforms to exploring PaaS and hybrid deployment options and related integration options
  • Focusing on growth and strategy business drivers to reverting to operational efficiency and compliance business drivers
  • Crafting a long term apps strategy to recession proofing an apps strategy
  • Moving to all packaged apps to reviving custom development
Software Licensing, Pricing, and Contract Negotiations
  • Locking in new license pricing to reducing shelf ware
  • Negotiating on new license prices to zeroing in on the cost of maintenance
  • Focusing on future product road maps  to avoiding the risk of a revenue led software audit
  • Planning for upgrades to contemplating third party maintenance
  • Worrying about vendor consolidation to considering vendor viability and the need for software escrows
  • Thinking about maintenance as an insurance policy to seeking value from maintenance contracts
Master Data Management - Customer Data Integration
  • Contemplating deployment of multiple data entity MDM to proving the value of one data entity with the ambition of multiple data entities
  • Applauding rapid implementation times of 1 year to expecting results in 6 to 8 months
  • Expanding data governance roles to focusing on specific stakeholder data processes
  • Turning to the incumbent ERP vendor for one throat to choke to considering all options
  • Ignoring BI strategy and focusing on enterprise architecture to incorporating BI into MDM projects
Order Management
  • Reducing inventory to improving transportation management costs and back again
  • Focusing on multi-channel selling to driving efficiencies in multi-channel fulfillment in a perfect order
  • Emphasizing partner channels to taking back ownership of distribution
  • Moving away from piecemeal solutions to purpose built order management hubs
Project Based Solutions
  • Considering PPM apps to seeking broader Project Based Solutions
  • Standardizing on project management methodology to reducing the barriers to adoption
  • Deploying only in one option to expecting various deployment options such as mobile, SaaS, and offline
The Bottom Line - Customers Still Have High Expectations For Enterprise 2.0 Apps Despite the bleak economic outlook, like in 2002, we can expect significant innovation to emerge as new business models meet technology innovations.  Conversations with over 1000 end users this year highlight that customers still expect to see Enterprise 2.0 innovations in the next 3 to 5 years, despite any downturn.  The top seven key Enterprise 2.0 innovations include:
  1. Richer user experiences - role based scenarios across various usability paradigms
  2. Business process orientation - support for end to end business processes
  3. Configurable change - designing with flexible models and rules instead of customizations
  4. Actionable insight - pulling all the key information to make a decision in the context of business process and user role
  5. Collaboration - providing secure private interactions and open and innovative connection with stakeholders
  6. Intelligent response - responding to contextual models and business events
  7. Hybrid deployment - deploying all models from on-premise, hosted, instance virtualization, multi-tenant SaaS, and cloud based BPO.
Let's just hope these humble 2009 industry analyst predictions hold some water. Your POV. Do you believe we'll turn the corner like 2002?  Are you experiencing different trends?  You can post here or send me a private email to rwang0@gmail.com. Copyright © 2008 R Wang. All rights reserved.

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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.

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Tuesday’s Tip: Software Licensing and Pricing – Get Rid of CPI Escalation Clauses In Maintenance

Published on December 2, 2008 by R "Ray" Wang
Consumer Price Index clauses represent additional costs of ownership that should be avoided.  Maintenance typically represents 2 times the cost of the original license fees after 10 years of ownership.  Many customers have these CPI clauses in their contracts.  In the worst cases, customers may have signed CPI + X%.  CPI adjustments provide very little value to the customer and their increases are often not used for reinvestment in the product line the charges are based from.  Some suggestions to increase vigilance in reducing unnecessary vendor imposed fees:
  • Eliminate the CPI clause. Take it out of contracts.  Eliminate the uncertainty all together.  The cost of supporting customers over time goes down with time and there really is no need for a CPI clause in your contract.
  • Include language for negative CPI. If the best is that deflation will occur, specify in the contract that a negative CPI indicator will lead to a decrease in maintenance fees.
  • Lock down a fixed maintenance price for the life of the relationship.  Take the hassle out of all maintenance fee increases.  Some vendors have honored life time maintenance fee agreements.  With the economy the way it is, we are seeing some vendor starting to rehonor such agreements.
The bottom line. In a recent survey of major software vendors, 27 of 29 vendors have canceled their initiatives to raise maintenance fees for 2008 and 2009.  While outward increases are not common, the CPI escalation clause is a "stealth" way to increase maintenance on existing customers over time.  As inflationary fears are being replaced by deflationary worries, enterprises in the midst of contract negotiations should change how vendors adjust maintenance fees and eliminate CPI outright or seek a concession that limits these increases. Your POV. Got a tip for optimizing existing software contracts?  You can post here or send me a private email to rwang0@gmail.com. (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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Monday’s Musings: The Three Pillars of Software Maintenance And Support Policies

Published on November 17, 2008 by R "Ray" Wang
After more than 350 conservations with customers about the maintenance and support issue in the past 4 months, it's becoming quite clear what users expect from their software vendors.  While those issues can be broken into tens of categories, three themes have emerged that include:
  • Choice. Customers want to choose between tiered plans.  The best plans allow customers to select the option best for them. Choice means the availability of a basic plan or the full range of services expected in a comprehensive "insurance policy".
  • Value. Users expect plans to show ROI or meet service level agreements (SLA's).  These SLA's should reflect outcomes not just process.  If a user contacts a help desk 5 times a year and pays $500,000 in maintenance, at $100,000 a call, they better be getting platinum response levels of 1 hour or less and a resolution in 24 to 48 hours.
  • Predictability. Maintenance and support remain one of the biggest budget items in the ownership of packaged apps.  Changes in price, policies, or service levels should be communicated with at least 4 quarters notice.  The best vendors provide guidelines that give customers predictability 2 to 3 years in advance.
The bottom line- can vendors deliver on such promises? Let's see which vendors can deliver on all 3 pillars.  Recent financial analyst reports from investment houses (i.e. Merrill Lynch's Kash Rangan w.r.t. Oracle and Merrill Lynch's Raimo Lenschow w.r.t SAP) indicate a sharpening downward trend in revenue estimates, not only for Q4 2008, but also for FY 2009 and FY 2010.  Software vendors under pressure to make margins will be forced to choose whether they are willing to take short term pain in stock valuations for long term gain in improving the vendor-client commitment or make their numbers by disenfranchising customers during a time of crisis by violating any one of the three tenants of maintenance pricing.  Because many software vendors have blown through their Q1 2009 pipe in Q4 2008, new deals are scarce and maintenance revenues are the easiest targets for "guaranteed" revenue and price increases. Your POV. Are you being hammered in your existing maintenance arrangements?  Do you feel locked in or do you feel your vendor is willing to work with you on deals? Feel free to share with me your experience.  You can post here or send me a private email to rwang0@gmail.com. Copyright © 2008 R Wang. All rights reserved.

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