Posts Tagged ‘software ownership’

Research Summary: Constellation Cosmos – Cloud Bill of Rights for SaaS Apps, Actian and Netsuite Achieve Epic Status

Published on April 17, 2013 by R "Ray" Wang

Constellation Certifies Vendors On How Well They Perform To The Cloud Bill Of Rights

The Enterprise Cloud Buyer’s Bill of Rights provides a tool for clients and vendors to change the tenor of contract negotiations from user subservience to an equal and collaborative long-term partnership. This Constellation CosmosCertification for the Cloud Buyer’s Bill of Rights: SaaS Applications is intended to help buyers and prospective buyers of enterprise cloud applications identify the vendors that meet the spirit of the Cloud. The certification applies four of the six Cosmos categories and includes ownership experience, use case support, corporate vision and ecosystem feedback. Constellation rates vendors on a 0- to 5-point scale. Constellation’s goal is to recognize vendors for honoring these rights upfront in their existing contract language and throughout the buyer and ownership experience.

Behind The Scenes On How The Cosmos Works

Constellation CosmosTM is Constellation’s flagship quantitative and qualitative product and solution comparison tool. A typical Cosmos contains 50 to 150 exception-based criteria used to help buy-side clients with product and solution selection across the galaxy of choices. The evaluation comprises of six major categories on a 0 to 5 point scale where Constellation evaluates key criteria in:

Ownership experience. Criteria evaluated include assessments on vendor executive advocacy and accountability, timely and meaningful interactions, professional customer support, overall sales cycle and buying process, quality of product and service, and ongoing transparency.
Solution offering. Criteria evaluated include assessments of functional requirements, technical requirements, architectural considerations, and deployment options pertinent to the category.
Use case support. Criteria evaluated include assessments on the ability to support anywhere from 3 to 12 popular use cases requested by end user clients. Use cases typically align with a business process. Considerations include geographical requirements, market size requirements, and industry requirements.
Market execution. Criteria evaluated include assessments of the total number of live customers, total number of customers including prospects, total number of customers over 1B in revenue, funding raised to date (if a startup), total annual revenues, total number of external trained professional service staff, total number of internal trained professional service staff, number of updates per year, and geographic penetration
Corporate vision. Criteria evaluated include assessments of the strength of management team, product direction, level of innovation, market leadership, community stewardship, and investment in R&D.
Ecosystem feedback. Criteria evaluated include assessments of vendor-supplied references (at least 3), direct customer feedback from inquiries and interactions, and partner feedback.

The final ratings place solutions into 5 categories

Epic. Composite scores typically above 4.25
Stellar. Composite scores typically between 3.25 and 4.24
Emerging. Composite scores typically between 2.25 and 3.24
Nascent. Composite scores typically between 1.25 and 2.24
Laggard. Composite scores typically between 0 and 1.24

The Constellation Cosmos^TMgraphic is a three-dimensional visualization tool built from three axes:

Capability represents the X-axis. Capability includes the use case support and solution offering categories.
Strategy and execution drives the Y-axis. The score comprises of market execution and corporate vision.
Reputation forms the Z-axis. The scores come from the ownership experience and ecosystem feedback categories.
Weighted score defines the radius of the sphere. The scores are the composite from capability, strategy, and reputation.

Constellation updates Cosmos’ periodically as client demand dictates. Some reports may be deprecated over time based on lack of market interest. Constellation reserves the right to determine when reports are updated and in what manner.

NetSuite and Actian Corp Achieve Epic Status In the First Of Many Certifications Of Cloud Companies
For the Cloud Bill of Rights: SaaS Applications, the application and the vendor contract were evaluated on 61 criteria. Constellation evaluated the vendors based on the experience of over 1500 software contract negotiations.

Netsuite provides an end-to-end cloud business application suite and was certified against the 61 criteria listed in Constellation’s Cloud Bill of Rights and the Constellation Cosmos methodology. Netsuite achieved a 4.48 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category

Actian Corporation was certified against the 61 criteria listed in Constellation’s Cloud Buyer’s Bill of Rights and the Constellation Cosmos methodology. Actian Corporation’s acquired Pervasive Software on April 11, 2013. Constellation evaluated Pervasive Software prior to the merger. The cloud based integration application known as Actian DataCloud and its contract were evaluated on 61 criteria in the Cloud Buyer’s Bill of Rights: SaaS Applications.. Actian DataCloud achieved a 4.77 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category.

Report Links

Download a snapshot of the reports at the Constellation Research website:

Constellation Cosmos – Cloud Bill of Rights: Saas Apps Actian Corp.

Constellation Cosmos – Cloud Buyer’s Bill of Rights: SaaS Apps – Netsuite, Inc.

Your POV.

How’s contract negotiations with your Cloud Vendors? Let us know your experiences. Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

News Analysis: UsedSoft Vs Oracle Ruling Opens Up Monopolistic Practices By Software Vendors

Published on July 4, 2012 by R "Ray" Wang

Used Software Pioneers Gain A Small Victory In A Shrinking On-Premises Software World

The surprise July 3rd, 2012 judgment by the Court of Justice of the European Union for UsedSoft GmbH v Oracle International Corp rules that “An author of software cannot oppose the resale of his ‘used’ licenses allowing the use of his programs downloaded from the internet”.

“The Court of Justice interprets EU law to make sure it is applied in the same way in all EU countries. It also settles legal disputes between EU governments and EU institutions. Individuals, companies or organisations can also bring cases before the Court if they feel their rights have been infringed by an EU institution.”

The recent ruling on the rights of used software mirrors other rulings in cases such as SusenSoftware v SAP and UsedSoft v Microsoft. Analysis of the ruling shows that:

Exhaustion Rule is now the rule of the land. While the German Federal Court of Justice (BGH) on July 6th, 2000 upheld this legal foundation, many vendors have continued to challenge the case. In this instance the BGH sent the case to the Court of Justice to interpret the UsedSoft v Oracle International Corp case. The court deliberated and finally ruled that “The exclusive right of distribution of a copy of a computer program covered by such a license is exhausted on its first sale”.

Point of View (POV): UsedSoft’s primary business model is to market licenses acquired from Oracle customers. After acquiring rights to the license, UsedSoft’s customers who do not possess the software download the licenses directly from Oracle’s website. Applied to the “Exhaustion Rule”, this means that the developer’s copyright exclusive right of distribution expires at the time of sale. In summary, a developer can only make money on the initial sale and any attempt to restrict trade of used software through specific trade terms conflicts with the exhaustion rule.

Exhaustion Rule applies to physical and downloaded software. This applies to any on-premises software purchase in person and on-line anywhere in the territory of a Member state of the EU. The ruling states that “the principle of exhaustion of the distirbution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD), but also where he distributes them by means of downloads from his website.”

Point of View (POV): Oracle’s main argument in the case that the directive does not apply to licenses downloaded from the internet is struck down. As the highest court in the EU, this ruling is the final ruling. Downloaded or bought in physical form, exhaustion rule applies to all software including both enterprise, personal, and games. New acquirer of the licenses can download it directly from the vendor’s site.

Software publishers can no longer oppose the resale of the copy of software. The court clarified two points on resales of copies of software. The first, “Where the copyright holder makes available to his customer a copy- tangible or intangible – and at the same time concludes, in return form payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that right holder sells the copy to the customer and thus exhausts his exclusive distribution right.” The second, “Such a transaction involves a transfer of the right of ownership of the copy. Therefore, even if the license agreement prohibits a further transfer, the right holder can no longer oppose the resale of that copy”

Point of View (POV): The clarifications on the resale of the copy of software have huge ramifications. Based on the ruling, “the distribution right extends to the copy of the computer program sold as corrected and updated by the copyright holder”. Users basically have rights to all updates at the time of the sale and this latest version can be sold to the secondary market. Users who fail to download updates have rights to resell those alterations to the next customer. The subsequent customer would not have such rights.

Software licenses can not be divided in the resale and be reused. The ruling clarifies ownership provisions upon reselling. “If the license acquired by the first acquirer relates to a greater number of users than he needs, that acquires is not authorised by the effect of the exhaustion of the distribution right to divide the license and resell only part of it”. “An original acquirer of a tangible or intangible copy of a computer program for which the copyright holder’s right of distribution is exhausted must make the copy downloaded onto his own computer at the time of resale”

Point of View (POV): The court wisely upholds copyright law by requiring the seller to remove the property from their possession prior to resell. However, the inability to divide licenses means that users will have to be careful about the number of licenses they purchase upfront or purchase with separate contracts to allow for the resell of licenses in the future.

The Bottom Line For Buyers: In the EU You Own Your Software Free And Clear of Vendor Encumbrances

More…

News Analysis: Spinnaker Expands JD Edwards Support With Versytec Acquisition

Published on March 25, 2012 by R "Ray" Wang

Versytec Acquisition Addresses Growing Demand For JD Edwards Support

Denver, Colorado based Spinnaker Management announced on March 6th, 2012 its acquisition of competitor Versytec. For those who remember their third party maintenance (3PM) history, Versytec was among the first firms to announce third-party maintenance services within a year after PeopleSoft acquired JD Edwards in July 18, 2003. Constellation estimates that Nashua, New Hampshire based Versytec had between 35 to 40 active 3PM customers.

Third-party maintenance describes support and maintenance offerings delivered by non-OEM providers. These vendors can provide a range of options from basic break/fix to bug fixes, performance optimization, tax and regulatory updates, and customization support. Keep in mind, 3PM does not provide access to upgrades and future versions of the OEM’s product. One big driver is the lower cost of delivery, as much as half the cost of the original vendor’s pricing. Today most customers pay in maintenance and support the equivalent of a new license every 5 years without achieving the value. For an average JD Edwards customer that upgrades every 15 years, that’s three times the cost of the original license cost. In the latest Constellation research report, third party maintenance is one of many strategies to free up millions for customers to fund innovation.

The Spinnaker-Versytec deal is important for a few reasons:

Many JD Edwards customers seek alternatives to Oracle’s pricey maintenance fees. Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues. From inquiries, surveys, and conversations on the ground, many Oracle JD Edwards World and EnterpriseOne ERP customers seek options to buy-time as they consider whether they upgrade or migrate from their current version. Why? Most JD Edwards customers run stable environments and do not gain any value from the Oracle one-size fits all 22% support policy. Most customers seek phone support and tax and regulatory updates.
The market needs more options and choices in the third party maintenance market. Many OEM vendors have gone to the extreme to eliminate third-party options for their customers. This anti-competitive behavior takes away choice for the customer. A bulked up Spinnaker creates a viable organization that has the critical mass to compete with Oracle. The combined entity provides third party support services to an estimated ~~100~~ 160 JD Edwards customers across the globe.
Spinnaker Support offers a different approach to third party maintenance. Spinnaker couples its third party maintenance options with consulting services providing a one-stop shop for JD Edwards customers. Spinnaker also differentiates in its download methodology of customer entitled IP from Oracle. Spinnaker provides customers with a checklist of what to download prior to migration off Oracle support.

The Bottom Line: Users Must Advocate for Third-Party Maintenance Rights Across the Technology Stack

More…

Research Summary: Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions

Published on March 18, 2012 by R "Ray" Wang

Forward And Commentary

Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues. Some vendors have gone to the extreme to eliminate third-party options for their customers. This best practices report examines three strategies to free up unnecessary costs to fund innovation and new projects.

A. Introduction

On average, IT budgets are down from 1-5 percent year-over-year, yet software support and maintenance costs continue to escalate ahead of inflation. Hence, continued pressure on IT budgets and a growing need for innovation projects have top business and technology leaders reexamining their software support and maintenance contracts for cost efficiencies.

Based on experience from over 1500 software contract negotiations, Constellation suggests three approaches to reduce the cost of software support and maintenance. Key strategies include third-party maintenance, shelfware reductions and unbundling maintenance contracts as part of every organization’s tech optimization strategy. Successful implementation can lead to savings from 10-25 percent of the IT budget, freeing up cash to fund innovation initiatives.

B. Research Findings – Why Every Organization Should Consider Third-Party Maintenance, Shelfware Reductions and Unbundling Maintenance Contracts

Most organizations suffocate from the high and hidden cost of support and maintenance. On average, Constellation’s surveys reveal global IT budgets trending down from 1-5 percent year-over-year since 2008. Consumerization of IT, rapidly changing business models, and aging infrastructure have exposed the high cost of software support and maintenance. Because most organizations allocate from 60-85 percent of their budget to keeping the lights on, very little of the budget is left to spend on new projects (see Figure 1).

Organizations can unlock millions by considering third-party maintenance (3PM), reducing shelfware, and keeping support and maintenance contracts unbundled. Each strategy on its own creates opportunities to drive cost savings. All three strategies combined, provide a roadmap for funding innovation.

Third-party maintenance (3PM) delivers the most immediate cost savings and opportunity for innovation. Third-party maintenance describes support and maintenance offerings delivered by non-OEM providers. These vendors can provide a range of options from basic break/fix to bug fixes, performance optimization, tax and regulatory updates, and customization support. Keep in mind, 3PM does not provide access to upgrades and future versions of the OEM’s product. One big driver is the lower cost of delivery, as much as half the cost of the original vendor’s pricing. The report shows a survey of 268 respondents and why organizations choose 3PM and who the key vendors are.
Reduction of shelfware remains a key pillar in legacy optimization strategies. Shelfware (i.e. purchased software, not deployed, but incurring annual maintenance fees) is one of the biggest drains on operational expenses for enterprises. The simple definition of shelfware is software you buy and don’t use. For example, an organization that buys 1000 licenses of Vendor X’s latest ERP software and uses 905 licenses, becomes the proud owner of 95 licenses not being utilized. That’s 95 licenses of shelfware because the user will pay support and maintenance on the license whether or not they use the software or not. The report details 4 successful and proven approaches.
Unbundling maintenance contracts prevents future vendor mischief. About a decade back, vendors would offer support and maintenance as two separate line items on their contracts. Support would run about 5-10 percent of the license fee and so would maintenance. Keep in mind, average support and maintenance fees were under 15 percent back then. Unfortunately, many users have expressed a growing and concerning trend with support and maintenance contracts. Vendors concerns about support and maintenance contract retentions have led to new initiatives to consolidate contracts. At first glance, this may appear to be proactive and beneficial to customers, but the report details three rationales vendors provide and three strategies how to avoid bundling.

Figure 1. Visualizing the High Costs of Support And Maintenance

(Right-click to see full image)

More…

Tuesday’s Tip: Five Cloud/SaaS Contract Negotiation Tips For 2012

Published on January 10, 2012 by R "Ray" Wang

Business Leaders Often Poorly Prepared For Cloud/SaaS Contract Negotiations

Business leaders often take great care in building their Cloud and SaaS strategy, only to have many of the benefits of flexibility and agility hampered by overlooking details in their cloud contracts. In conversations with over 200 cloud customers in 2011, key reasons include:

A common belief that SaaS and Cloud contracts are simple
Lack of software contract negotiations and procurement experience
Failure to review previous departmental contracts now in renewal mode
Limited access to SaaS and Cloud contract expertise

Avoid These Common Mistakes In Cloud Contracts

While SaaS/Cloud contracts are considerably less complicated, buyers should remember that even Cloud/SaaS software contracts still require some careful planning. Lessons learned from over 1200 software contract negotiations highlight five common mistakes made in cloud contracts.

Blindly including support costs with the contract. While Cloud/SaaS contracts automatically bundle maintenance and updates into the subscriptions, customers often do not realize that they do not have to buy support. In fact, vendors are not allowed to require customers to buy support with subscription. Avoid going for the highest level support upon initial contract signing. This option can always be added at a later date.
Failure to negotiate flex up provisions. Most contracts begin with a small number of users in a departmental setting. However as usage grow, most enterprises just add additional users without securing upfront discounts potentially leaving 1000′s of dollars on the table. In contracts, remember to secure discounts for 2x, 3x, and 4x, your initial usage.
Forgetting to negotiate flex down. As with securing discounts for adding usage, the true test of elasticity occurs when companies flex down usage. Negotiate the ability to reduce usage by 10%, 20%, and 30% without incurring penalties.
Paying upfront without a discount. While many Cloud/SaaS vendors prefer annual agreements and annual payment upfront, savvy Cloud/SaaS buyers prefer to pay in more frequent cycles such as monthly and quarterly. Should a Cloud/SaaS provider seek upfront payment, negotiate a discount commensurate to your hurdle rate.
Not trading refrenceability for success. Customers often jump at the ability to serve as a referenceable client without ensuring that the software has been deployed. Agree to serve as a reference only after the software has been deployed. One common strategy, trade referenceability for prioritization of key features into the next release.

As Cloud/SaaS contracts emerge as the norm, buyers should keep abreast of other changes. Stay tuned for the 2012 Cloud/SaaS Customer Bill of Rights to be published Q1 2012.

Your POV.

Need help with your software contract? Contact us throughout the vendor selection process. We can help with a quick contract review or even the complete vendor selection. Let us know your experiences. Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

How can we assist?

Buyers, do you need help with your apps strategy and vendor management strategy? Trying to figure out how to infuse innovation into your tech strategy? Ready to put the expertise of over 1200 software contract negotiations to work? Give us a call!

Please let us know if you need help with your next gen apps strategy efforts. Here’s how we can help:

Providing contract negotiations and software licensing support
Evaluating SaaS/Cloud options
Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
Designing innovation into end to end processes and systems
Comparing SaaS/Cloud integration strategies
Assisting with legacy ERP migration
Engaging in an SCRM strategy
Planning upgrades and migration
Performing vendor selection

Related Resources And Links

20100419 Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

20090714 Research Summary: An Enterprise Software Licensee’s Bill of Rights, V2

20101214 Tuesday’s Tip: Dealing With Vendor Offers To Cancel Shelfware And Replace With New Licenses

20100308 Monday’s Musings: Decoupling Support From Maintenance – What Apps Vendors Can Learn From Microsoft Dynamics

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

20100104 News Analysis: SAP Revives Two-Tier Maintenance Options

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

20090709 Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

20091222 Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091102 Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

20091006 Tuesday’s Tip: Why Free Software Ain’t Really Free

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

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

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

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

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

20090721 Tuesday’s Tip: 3 Approaches To Return Shelfware

20090127 Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Vendor Event: Avangate SkyCommerce – Selling Software and SaaS solutions in a World of Many Channels, Many Models

Published on November 22, 2011 by R "Ray" Wang

Title: SkyCommerce: Selling Software and SaaS solutions in a World of Many Channels, Many Models
Start Date: 2011-12-08 11:30 am GMT
End Date: 2011-12-08 2:00 pm GMT
Location: The Hospital Club - 1st Floor Restaurant, 24 Endell St, Covent Garden, London, WC2H 9HQ

Find Out the Latest Trends & Insights in Building Your Software Business

Who: eCommerce Managers, Marketing & Sales Managers, Channel Managers
Cost: Complimentary with accepted invitation or registration, lunch included

Selling Software and SaaS solutions in a World of Many Channels, Many Models

The software market today is driven by the rise of cloud computing, forcing independent software vendors (ISVs) to fight commoditization-driven margin pressure, expand to new channels and markets, and move to “frictionless” self-service transactions. These new delivery models have irrevocably altered how software is developed, distributed and consumed.

Featured Speaker:

R “Ray” Wang

Principal Analyst and CEO
Constellation Research Group

R “Ray” Wang currently is a Principal Analyst and CEO at Constellation Research Group and the author of the popular enterprise software blog “A Software Insider’s Point of View“. With viewership in the millions of page views a year, his blog provides insight into how disruptive technologies and new business models impact the enterprise. Ray blogs at Forbes CIO Central and for Harvard Business Review. In both 2009 and 2010, Ray was recognized by the prestigious Institute of Industry Analyst Relations (IIAR) as the Analyst of the Year, and named a top Influential Leader in the CRM Magazine 2010 Market Awards.

Key Takeaways

Why Attend

You will be provided an in-depth analysis to help you:

Better understand the rapidly changing nature of how software and SaaS solutions are being sold both online and through channels
Anticipate the evolution of your selling channels, still representing over 50% of how software is sold, and how to and optimize your channel revenue
Incorporate a broader perspective of eCommerce into your strategy. We’ll explore how to make the most of the disruptions being caused by the rapid change of how software is delivered and consumed

Learn what makes online commerce effective in your strategy and how to anticipate its future impact on your business
Learn online and channel concepts that you can apply at your company
Connect with other software and SaaS vendors who are building their business online
Enjoy a great lunch at a fantastic restaurant

Research Summary: Market Overview – The Market For SAP Optimization Options

Published on May 15, 2011 by R "Ray" Wang

Forward And Commentary

This market overview provides a starting point to SAP customers seeking optimization solutions. The document delivers actionable advice and insights into a proven collection of software solutions. As part of the full series, best practices documents will follow with in- depth case studies and a critical product evaluation of this growing market of SAP optimization solutions.

A. Introduction

With the average Global 2000 ERP deployment nearing 11.5 years in service, ERP customers face a significant challenge with updating their existing investments. Installed pre-Y2K, users have attempted to work around the best practices of the ‘90s while seeking innovation and application agility. Subsequently, SAP users face three main challenges:

Higher cost of ownership that reduces overall ROI.
An aging and brittle infrastructure that hampers innovation.
Increasing complexity that hampers greater adoption.

B. Research Findings

As SAP customers choose their go- forward apps strategy, interviews from 100′s of clients show that four paths emerge (see Figure 1):

Stay with status quo;
Move to shiny new SAP.;
Stabilize SAP and augment; and
Modernize SAP and surround with best-of-breed.

Figure 1. The Four Paths Of SAP Optimization

Consequently, an $80.1 billion third-party SAP ecosystem has emerged to address nine key areas (details on each vendor in the official report):

More…

Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

Published on April 19, 2011 by R "Ray" Wang

Organizations Report Increase In Software Licensing Audits

Across the board, the largest complaints about software vendors and their business practices have come from increasingly aggressive software auditing practices. Once thought to be a small possibility, the software vendors now wield this big stick to drive up sales and of course ensure compliance. Given the 32 percentage gain since Q1 2008 in the percentage of respondents faced with a software audits, procurement managers, CIOs, and CEOs have paid attention (see Figure 1). Even the recent Gartner report from star analyst Jane Disbrow et al. shows that 61% of their customers have been audited by at least one software vendor.

Figure 1. Software Vendors Ramp Up Software Audits

Software Licensing Audits Masquerade As Sales Tactics In Disguise

Is this shocking? Should customers be concerned? Given the relatively strong compliance rates in the high 80′s, customers should be livid that vendors are willing to jeopardize a relationship to shake down for cash (see Figure 2.). Here are some key reasons for the audit:

Check for compliance
Identify installed base competitors
Drive incremental license sales
Prospect for up-sell/cross-sell

After speaking with 13 major software vendors, most admitted that software audit served two purposes. The first – keep customers in compliance. The second – shaking the bushes for new deals during the recession.

Figure 2. Most Organizations Were In Compliance Post Software Audit

More…

Research Report: Constellation’s Research Outlook For 2011

Published on January 4, 2011 by R "Ray" Wang

Organizations Seek Measurable Results In Disruptive Tech, Next Gen Business, And Legacy Optimization Projects For 2011

Credits: Hugh MacLeod

Enterprise leaders seek pragmatic, creative, and disruptive solutions that achieve both profitability and market differentiation. Cutting through the hype and buzz of the latest consumer tech innovations and disruptive technologies, Constellation Research expects business value to reemerge as the common operating principle that resonates among leading marketing, technology, operations, human resource, and finance executives. As a result, Constellation expects organizations to face three main challenges: (see Figure 1.):

Navigating disruptive technologies. Innovative leaders must quickly assess which disruptive technologies show promise for their organizations. The link back to business strategy will drive what to adopt, when to adopt, why to adopt, and how to adopt. Expect leading organizations to reinvest in research budgets and internal processes that inform, disseminate, and prepare their organizations for an increasing pace in technology adoption.
Designing next generation business models. Disruptive technologies on their own will not provide the market leading advantages required for success. Leaders must identify where these technologies can create differentiation through new business models, grow new profit pools via new experiences, and deliver market efficiencies that save money and time. Organizations will also have to learn how to fail fast, and move on to the next set of emerging ideas.
Funding innovation through legacy optimization. Leaders can expect budgets to remain from flat to incremental growth in 2011. As a result, much of the disruptive technology and next generation business models must be funded through optimizing existing investments. Leaders not only must reduce the cost of existing investments, but also, leverage existing infrastructure to achieve the greatest amount of business value.

More…

Polls And Surveys: Insider Insights™ – Customer Centric Cloud Agreements

Published on August 26, 2010 by R "Ray" Wang

Annual Evaluation On SaaS Satisfaction Begins This Fall

The Software Insider Insights™ solution evaluation and buyer comparison tool will launch this Fall. The first report focuses on Customer Centric Cloud Agreements – Software-as-a-Service (SaaS). This evaluation will:

Identify the leading seller/vendors delivering SaaS based applications that adhere to the spirit of the cloud
Evaluate seller/vendors performance against the latest provisions in the Customer Bill of Rights: Software as a Service (see Figure 1)
Recognize seller/vendors who deliver a customer centric approach to SaaS solutions.

Invited Vendors Represent Today’s SaaS Leaders

The 2010 Customer Centric Cloud Agreements- SaaS evaluation ranks the most popular vendors by inquiry and contract frequency. The invited participants also qualified based on overall total number of subscribers. The current list of evaluated vendors will include:

Ariba
Concur
Epicor Lite
FinancialForce
Intacct
Microsoft Dynamics CRM OnDemand
NetSuite
Oracle Siebel OnDemand
Plex Systems
RightNow Technologies
Salesforce.com
SAP ByD
SuccessFactors
Taleo
Ultimate Software
Workday

Your POV: Your Input Makes The Difference

As part of the Insider Insights evaluation process, input from users will be incorporated into the evaluation process. Please take the time to complete this short 10 question survey. As an added incentive, 5 respondents will be randomly chosen on September 30th to win a free 30 minute advisory call with R “Ray” Wang to be used by 2010.

Share with us your input here:

More…