Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

A Licence To Kill For

No more Mr Nice Guy. It's time to get tough at the bargaining table.
Page:

Dr Kevin McIsaac recently met with a client who had managed to knock the price of Oracle licences down from almost $1 million to just $200,000 through intense negotiations and contract tweaking. While impressed with his client's killer instincts, McIsaac reckoned there was scope to get the price down even further - perhaps as low as $60,000 or $70,000 - just by going with the Standard, rather than the Enterprise Edition. He recommended as much.

"[The client] said: Â'You're a bit ruthless aren't you?' And I said: Â'Not at all. With Oracle you've got to play to win. You've got to be ruthless'," Meta Group's program director server infrastructure strategies says.

Strangely enough, it was soon after that that Oracle apparently discovered a mistake. It was profoundly sorry, but it had failed to take into account that the client wanted a fail-over cluster. That meant it would have to license both machines. Suddenly the vendor's hand was out for an extra $100,000.

"So the price went up considerably, and then the guy came to me and said: Â'Now I know why you were always, constantly, ruthlessly hounding away about how to knock money off of Oracle'," McIsaac, an Oracle specialist, says. (Not that we're picking on Oracle: it is just that McIsaac says they are among the industry's best negotiators, and that is, after all, their job. He appreciates them for it.)Robert Neely also has clients who are being squeezed by software vendors. The partner at legal firm Minter Ellison says a couple of his clients are selling off a part of the business and want to separate out their software licences so that both parties can use them. He reports the vendor is insisting it has the right to charge the parts of the business being sold a completely new licence fee. Neely reckons he'll win that battle for his clients in the end, but says the whole conflict could have been avoided had the initial contract contained provisions for such an eventuality.

"We've got many instances where companies are acquired by another company or acquire another company and there needs to be a consent built into the licence so that that doesn't trigger any renegotiation with the licensee," Neely says. "If you've dealt with it properly in the licence in the first place, it's much harder for a vendor then to take a position which is unfavourable."

Page:

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Alpha, CPI, Department of Information Technology, HIS Limited, International Computer Negotiations, Meta Group, Microsoft, Minter Ellison, Minter Ellison, Minter Ellison, Oracle, Phillips Fox, Phillips Fox, ProVision, SAP

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Whitepapers
Latest Stories
Community Comments
Latest Blog Posts
Whitepapers
  • 10 Essential Steps to Email Security
    Modern business is reliant on email. All organisations using email need to answer the following questions: How do we control spam volumes without the risk of trapping a business email? How do we prevent infections from email-borne viruses? How do we stop leakage of confidential information? Can we detect and stop exploitation from phishing attacks? How do we control brand damage from occurring due to employee misuse? How do we prevent inappropriate content from being circulated?
    Learn more »
  • Delivering Tomorrow's Backup and Recovery Infrastructure
    The data protection market has changed considerably over the past decade. During this time, the market witnessed a fundamental shift away from relying solely on tape for backup and recovery to using disk-based backup solutions to address challenges including backup performance, reliability, and recovery time objectives. This paper highlights that firms evaluating next-generation data protection solutions must expect a greater degree of integration between the technology components in today's data protection path.
    Learn more »
  • Using Application Control to Reduce Risk with Endpoint Security
    Unwanted applications, like games, result in productivity loss. This is often the primary consideration when applying application control. But unauthorized applications also increase your company’s risks of malware infection and data loss. This paper details how endpoint security solutions that incorporate application control provide the most efficient, comprehensive defense against unauthorized applications.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments