Get more for your enterprise software budget: Negotiating strategies

There are more choices to navigate these days, but some fundamentals still apply, too

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Using SAM tools

Organizations are increasingly using IT asset management and software compliance software tools to get a handle on software assets and purchases.

For the last few years, Baker Hughes has been using CA's Discovery System Management software to monitor software assets on some 30,000 machines worldwide, so IT can determine if the numbers are in compliance with vendor agreements. "We initially found that we were overlicensed," says Crisp. "This is what we expected, because people were buying software as needed, rather than going to the trouble of figuring out if we had additional licenses to spare." The oil services company recently deployed CA's Software Compliance Manager, which automatically checks software usage against vendor licensing agreements.

In the past three months, Crisp's team has used CA's Discovery product to satisfy four audits. "It used to take four different systems to build data to satisfy Microsoft's audit for Windows Enterprise," he notes.

Mark Warren
"Edging up [in the number of end-user licenses] means no volume discount," says Mark Warren, acting CIO for 20/20 Companies.

CA Discovery also includes a metering tool that reports not only on used and unused licenses, but also on licenses that haven't been executed within a predefined time frame. "This will enable IT to harvest licenses that are just sitting on someone's desktop and redeploy them," says Crisp.

SAM tools need to be backed up by organizational practices such as systematic enforcement of software retirement, says Gartner's Snyder. Otherwise, data center administrators may keep an old system running while a new system is being tested and deployed, and then forget to delete it, he adds. Be aware, too, that some software packages don't remove everything from the registry when you delete a program, or allow two versions of the same program to coexist. This can get you a false positive during an audit, Snyder says.

Baker Hughes recently instituted a practice of assigning software to computers rather than to individuals, Crisp says. "When we decommission a computer, we harvest all software associated with it and reuse it more effectively," he notes. The payback: Microsoft enterprise license usage has stayed flat, even though the firm has purchased additional machines and equipment, Crisp reports.

Centralizing software administration has enabled Crisp's group to accurately charge back software costs to different units. Further, "it definitely helps us get volume discounts," he says.

However, SAM tools have yet to catch up with per-usage pricing models offered by SaaS and virtualization vendors, according to IDC's Konary.

Don't be afraid to bargain

Providing usage statistics to a vendor can give you leverage at the negotiation table, industry sources agree -- provided you know how to bargain. For example, if your vendor insists on invoking a contract clause that penalizes you for giving back unused licenses, ask if you can reallocate the cost of those licenses to other products that you do need, Altimeter's Wang advises.

One way you can get your enterprise software vendor to listen up is to mention that you're considering going with an alternative product.

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