How do you create better software vendor relationship without losing control or sharing critical data? Based on my experience from helping large and mid-size user organizations exclusively, I have selected 8 helpful hints to be smart about your vendor relationships and build a strong internal governance to avoid tough software audits:
- Maintain a friendly dialogue. All suppliers want to feel wanted and on your mind. If your account managers feel “in the know” about your organisation and that you’re working together, they may skip the audit. But make sure you control communications.
- Share your licensing strategies. Software companies want to understand your business goals with respect to license optimization and cost reduction, so that NEW opportunities can be created. Therefore, keep your account managers up to date with your SAM and ITAM targets so that they can offer innovative solutions, like trading license metrics from USER to CPU or to CORE or CLOUD.
- Stay on top of your software assets. Software companies want you to continue to use their software and buy more of it. That’s why understanding your licensing position is so critical. Without license monitoring in place, software vendors will continue to turn up each year demanding more money, as user organisations may fail to prove correct usage.
- Be open with your software suppliers about your own controls and license management. Working together with your supplier ensures that potential issues can be resolved more easily. Ask your software vendors to help you specifically, like clarifying complex licensing metrics. However, do not hand them your data or give them access to your data until you have performed due diligence, and if necessary engage with a consulting company to understand both technical and legal requirements to mitigate some of it – if not all of it.
- Move to the cloud carefully. Sitting in a cloud environment supplied by a software vendor can be a risk. This is because they will now know not only your current position, but also your peak usage. Keep in mind that usage levels will first be monitored by your provider, without your in-house ability to audit them. Therefore, ask your cloud provider for appropriate validation of his measurements, before accepting his operational model.
- Consider the next two terms of your cloud or hybrid-cloud transition. Most software vendors now have cloud or subscription offerings. And, as you negotiate cloud contracts, remember that software vendors pay their account managers higher commission rates for cloud products. Often vendors will offer amazing discounts that lock you in, however you need to consider the next two renewal periods to fully set up your financial impact. You must establish proper price-holds to call it an opportunity.
- Understand how and why your vendor uses software audits. Software companies that audit regularly have traditionally used the audit clause as a revenue generator. And different vendors may vary their aggressiveness, as well as what data they require in the event of an audit. As you work with your account manager, it’s important to determine:
- What is the software vendor’s stance on audits?
- Do you consider you are at risk for an audit?
- What is your current value of non-compliance?
- Be wary of your own corporate PR campaigns. When your marketing team announces to world that you are about to embark on a cloud migration, or that your company has grown by 10% – these announcements are seen by your suppliers and they will expect more money. If there is a big announcement coming down the pipeline, talk to your vendors first so they aren’t surprised later.
Always retain your buying power
The bottom line is working with software vendors is a negotiation process. As with any negotiation, retain control and do not follow vendor suggestions easily. In particular, use your license monitor to identify your real needs so that you can you negotiate discounts or better terms for your software licensing and avoid shelf-ware. And never consume all your buying power but keep some budget for the next shot.
Whether you need help performing an upcoming or current audit, or want to proactively strengthen your negotiation position, auditprotect can help. Talk us and learn about our two-fold competency in licensing and software law to protect your organisation from licensing risks now!