Good Strategies for Microsoft AND Big Software Co. Enterprise Renewals

A guest post earlier this month over on Spend Matters on “5 Mistakes to Avoid When Renewing a Microsoft Enterprise Agreement in 2015” had some good tips not just for Microsoft Enterprise Agreement renewals but Big Software Co. Renewals in general.

The major pieces of advice generalize as follows:

Waiting until the last minute for renewal negotiations.

While this may have worked in the past, the bigger providers have smartened up. They have learned that it’s not the month or quarter or the year, but profit that matters, and will wait a month to get more profit when they are sitting on a huge cash reserve. Also, they have learned that if you wait until the last minute, you probably haven’t identified any other options, and even if you did, would not have time to implement another option and it’s you they have over a barrel, not the other way around. In addition, as per the article, there are only so many sales people and, unless you are a really big customer, if the sales people are busy, they may not get to you before the licenses expire and the systems lock up.

An over focus on price and an under focus on terms and conditions.

Price is important, but, as per the article, so is matching the service offering to the organizational need. Not only do you not want to over subscribe, and end up with a large number of unused licenses, but you don’t want to subscribe for products that don’t meet organizational needs either. But this isn’t the most important thing — it’s the fine print. If organizational needs are in flux, the last thing the organization wants to be is locked into a multi-year agreement or a minimum license count, with a huge penalty if the organization tries to end the agreement early. Similarly, the organization wants to understand the full cost of a cloud service and, if additional bandwidth or CPU usage costs can be added on during periods of intensive usage, this needs to be understood as well.

Treating negotiations as a one-time event.

The buying organization may set-and-forget the three year renewal until thirty (30) months, or more, have passed, but the vendor will be analyzing the contract, and usage, every quarter and looking for ways to extend the offering as soon as possible. The organization needs to monitor its usage as well to be able to make an informed counter to a vendor who indicates that the company is nearing capacity in licenses, computing power, etc. when it is still 20% away from maxing anything out and only increasing in usage at 1% a month.

Not being audit ready.

Chances are your Big Enterprise Software Vendor has an audit clause in the contract for any licenses installed on premise. And chances are that if the organization has not had an audit in the last couple of years, that, unless the organization agrees to the default renewal (which will often be for more licenses than required at a higher rate), that the customer will be audited for usage. The organization should do it’s own software (license) audits on at least an annual basis and keep detailed records. Not only will it have the data to dispute any claims to the contrary made by the vendor, but it will be able to make sure it remains in compliance at all times.

Enterprise software is costly. But it doesn’t have to be a spend sinkhole.

Future Trends 2014 (Consolidated Links)

Sixty Five Years Ago Today

The legacy of the Dutch East India Company, which was the first multinational corporation in the world, fades into obscurity when the Netherlands officially recognizes Indonesian independence and brings to an end the existence of the Dutch East Indies.

On March 30, 1602, the Dutch East India Company, which was also the first company to issue stock, was established when the States General of the Netherlands granted it a 21-year monopoly to carry out trade activities in Asia. The largest of the European companies engaged in Asian trade, it had a fleet of 4,785 ships, which put the British East India Company a distant second at a mere 2,690 ships.

It’s monopoly status with quasi-governmental powers enabled Dutch East India Company to enjoy huge profits for almost two centuries until it want bankrupt as a result of corruption and was formally dissolved in 1800 and its operations taken over by the government, which created the Dutch East Indies out of the territories that were controlled by the Dutch East India Company. This colony continued to be one of the most prosperous of the European colonies and enabled the Netherlands to gain and retain global prominence in the spice trade for almost 150 years, until World War II when Japan’s occupation dismantled much of the colonial state and economy.

Following the Japanese surrender, the Indonesian nationalists declared independence and fought to secure it during the subsequent Indonesian National Revolution. A few years later, the Netherlands formally recognized Indonesian sovereignty at the 1949 Dutch-Indonesian Round Table Conference and the legacy of the Dutch East India Company, which led global trade for almost two centuries, like all good things, came to an end.

The Boxing Day Blogger’s Lament

Sorrow is my own yard
where the new grass
flames as it has flamed
often before, but not
with the cold fire
that closes round me this year.

For five straight years
On this day we spend rapped.
The web page is white today
no insights from grey beards.
Insights on spending
once filled many pages
put colour in our cheeks.

Yellow and some red,
but the grief in my heart
is stronger than they,
for though they were my joy
formerly, today they are absent
and we do miss old grey beard.

Today a bird told me
that in the meadows,
at the edge of the heavy woods
in the distance, he saw
a glimpse of grey beard.
I feel that I would like
to know that
the old grey beard will return
and bring us a spend rap again.