In the never-ending lifecycle of the software contract, there will eventually come a time for renegotiation with the publisher. Whether this is triggered by the end date on the existing agreement or changes in your business requirements, these negotiations are rarely simple and often stressful for both your organization and the publisher’s.
How can you make this as smooth as possible?
Let’s start with some basics:
- Know your contacts at the publisher. Be sure you have quick access to the right contacts at the publisher who can answer your questions. And if possible, find people who have authority to make decisions and concessions to help speed the process along. You may not want to tell them you’re opening negotiations right away, but the sooner you line up the right contacts the better!
- Ensure your workmates are not communicating with the publisher! Your coworkers are a vital conduit through which publishers gain insight into your company’s intentions. Even if you’ve shared your negotiation intent to the publisher – especially if you have – make sure to share the message with your organization that they should maintain silence with the publisher, to whatever extent possible. Except for vital business-as-usual activities such as patches and updates, employees should aim to keep matters mum until the negotiation process is complete.
- Get together with your Legal team and review terms of the current agreement. It will be vital that everyone on the negotiation team is well versed in the rights and limitations in the current agreement. From here, you can work together to identify the stipulations and concessions you’re looking to achieve in the new agreement. In addition, you can formulate the best-case and worst-case terms your organization can live with.
And now for some specifics:
- Have your inventory nailed down well in advance. Ideally, this is something you’ve put in practice at regular intervals. This ensures all parties are used to the “drill” of collecting software usage data. Teams that regularly collect and collate a picture of their software position are better prepared to manage licensing actively, and to avoid compliance issues. They will also have a good sense of the gaps and risks, and hopefully, mitigate them by the time it’s renegotiation season. Not only that, understanding how the software is used at the firm may highlight whether these products are meeting needs, are economical, and have the right features. Maybe a competitor has a better or cheaper product?
- Don’t just know the current inventory status! Poll your software users to understand the expected future demand. What business objectives/realities might affect things – for example, server population/configurations, or plans for Cloud or IaaS adoption? When it’s time for renegotiation, sizing the future contract should take these projections into consideration. In addition, attention should be paid to whether your company’s projected use cases fit with the publisher’s vision of the products.
- Check and validate the publisher’s portal. Does it agree with your records? Make sure to remove/clean up obsolete data, as this may affect your publisher’s opinion of the volume of licenses you are using, and what you may be required to buy.
And finally, a broader generality:
- Study up on industry trends. Refer to knowledgebase forums, industry articles, association newsletters, blogs, and of course, your colleagues and professional network. These sources may provide much needed insight into the current industry goings-on with contracts and tactics. Despite the confidentiality of such agreements, you may turn up valuable information to help you prepare for negotiations.
These are just a handful of the highlights that come to mind as I prepare my blog for submission. In short, these ounces of prevention (or really, preparation) will go a long way toward easing the negotiation process. After all, nothing beats a fully informed customer at the deal-making table!
I’d love to hear your thoughts and recommendations when facing a coming negotiation. Add your insights in the comments below!
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