Today the ITAM Review interviews Scott D. Rosenberg.
Scott is CEO and Founder of Miro Consulting Inc, known for helping customers analyze and negotiate enterprise agreements with the major publishers such as Oracle and Microsoft. We asked Scott to share an insight into the common errors firms make when signing agreements and his experiences in software asset management.
ITAM Review: Miro Consulting was formed in 2000; what led you to set up the company and what was your previous experience?
Scott D. Rosenberg: I always envisioned myself as becoming an entrepreneur someday. Miro Consulting helps companies negotiate Oracle and Microsoft licensing. We are often called in by the CIO or IT asset manager during vendor audits or right before procurement happens. As it happens, my business partner and president of Miro – Eliot Arlo Colon – is one of the foremost experts on Oracle licensing.
Our partnership was a natural fit and the company’s licensing practice was born, along with our software asset management services and preferred procurement program. Prior to Miro, I was a founding principal and driving force behind Cintra, an Oracle consulting company with more than $20 million in revenues. I view my experience at Cintra as my “entrepreneur in residence.” Those years were a transforming experience for me.
ITAM Review: Your company has helped companies save $1 Billion in Microsoft and Oracle Licensing Costs; what are the common mistakes you find when engaging with companies for the first time?
I could name at least two dozen off the top of my head, but I’ll keep it to five.
1- Jumping on the initial discount offered during a “bulk” buy. Many companies mistake bulk buying as the most cost effective method for procurement when, in fact, it probably leads to excess spending by about 35 percent. And, “shelfware” is only part of the story.
2- Not having a software asset management program in place, and that’s a killer during vendor audits. It’s the most common issue that leads to heavy-duty fines or expensive settlements. We had one media company come to us in a panic with a $6 million settlement on the table after a surprise vendor audit. Fortunately, we were able to do our own assessment and negotiate a better arrangement for both the company and the vendor. Other deadly mistakes that fall under SAM are over or under licensing and not having proper procurement procedures.
3- Not building flexibility into contracts. Businesses change over time and it’s essential to incorporate scalability provisions.
4- Failure to understand how licensing works during major corporate changes – such as a move to a virtual environment or during an M&A. You need to understand the interpretation of the licensing agreements, how to pull it together for a migration and then finally the actual migration and integration. Just to give you an example, people think that you only need one or a few licenses in a virtual environment because you only have “X” number of users at any given time, or that one license suffices to cover each server. That’s probably one of the biggest mistakes out there. Licensing is too complex to boil down to a couple of statements.
5- Assuming that the licensing right granted previously will be applicable down the line. While agreements are static in nature, businesses are not and neither is licensing. Companies should never assume licensing rights since licensing compliance is subject to interpretation based on several factors, such as environment, how the product is deployed, usage (how and how many) and a number of other small but significant factors.
ITAM Review: How does Oracle compare to other vendors in their approach to auditing their customers?
Oracle does its own audits, while some software vendors – such as Microsoft – use third-party auditors. With a third-party auditor, there is always much more room for appeal. While Oracle is willing to be reasonable before, during and after the auditing process, you need to be intimately familiar with how the company has historically settled audits.
ITAM Review: Does Oracle provide tools, information or resources to support their customers with licensing?
Absolutely. The Oracle website is chock full of information. However, as I said before, the software license agreements are static, whereas, businesses are not.
ITAM Review: What tools would you recommend or commonly work with for Oracle License Management?
At the moment, we’re reviewing a promising tool recently introduced into the market, but for now we rely on a fairly efficient process. Too many times managers are lulled into complacency because they think they have a software tool in place to capture information when in fact it falls short and, moreover, it doesn’t reconcile the information to what’s been agreed in the contract with the software vendor. And, that gets you into real trouble. You have to remember that Oracle audits through manually going through the licensing, matching it up with the terms and conditions of your contract. An automated systems does not do this.
ITAM Review: What projects are you currently working on?
I can’t get into specifics as we’re under non-disclosure with all our clients, which ranges from Fortune 100 companies to mid-sized enterprises. What I can tell you is that we’ve been working with clients to restructure everything from their existing SLA to helping them understand their software licensing obligations and from there, making an intelligent procurement based on short and long term business requirements.