It's a buyer's market for software deals

Computerworld - There's a bright spot in the current economic gloom: It's the best time to wheel and deal on enterprise resource planning (ERP), customer relationship management and other types of enterprise software applications.
Corporate IT buyers are in a "position of strength" to negotiate, since even financially healthy vendors are "feeling the pinch of the down economy," says Karen Peterson, an analyst at Stamford, Conn.-based Gartner Inc. Moreover, IT procurement managers should try to consolidate licenses and buy only as much software as their organizations will need for the coming year, she adds.
Budget-conscious IT purchasing specialists and analysts offer a variety of suggestions for getting discounts or favorable conditions for long-term software contracts. For instance, savvy managers already know that it's best to haggle with a salesperson when he's pressed to meet a monthly or annual quota. Purchasing in volume is another advantage, and it's always wise to do your homework and know your vendor.
Beyond the licenses themselves, there's the possibility of getting the vendor to commit to extra perks. For example, the vendor might help you identify potential opportunities for supply chain and other efficiency improvements.
"I try to fully understand the pricing methodology of the vendor," says Jim Prevo, CIO at Green Mountain Coffee Roasters Inc. in Waterbury, Vt. "Vendors are often looking for early adopters, reference customers and customers who purchase a broad array of software all at once. These can be factors in negotiating the final pricing."
Prevo was able to gain some significant concessions on an ERP deal by becoming an early adopter and purchasing multiple modules of the package. The result: Green Mountain ended up paying about half of what it would have for all the modules individually and negotiating a price cap on the support costs for three years, says Prevo.
Key Negotiations
Indeed, IT managers should make a point of negotiating annual maintenance fees - not just licensing costs - and try to get a reasonable pricing cap on them, Prevo suggests. "It doesn't do much good to get a steep discount on the license price only to find that the annual maintenance/support fee is 20% of the full list price," he says.
According to one information architect whose manufacturing firm runs an Oracle database, corporate IT buyers should "read, read over and reread anything to do with the licensing so you understand what you're buying." This New York-based manufacturing firm was able to get more favorable terms on a costly gateway it was buying by researching the competition, finding a