I spoke with Scott Braden and asked for his advice on helping companies negotiate better deals with Microsoft.
Scott was formerly president of Microsoft Secrets, and is now SVP at Net (net) where he helps companies save money and optimize their IT Investments.
Scott raised the following ten points to consider before signing your next Microsoft Agreement;
1. The First Quotation – Firstly, the basics; any vendor will typically lead with their most expensive solution and negotiate backwards – there are usually always a number of cheaper alternatives.
2. Sales Tactics – Don’t fall into the trap that ‘Microsoft doesn’t negotiate’ or consider you are not large enough to justify concessions or special terms.
3. Asset Visibility – Get a good inventory. If you want to make smart spending decisions you need to negotiate from a position of power. There will be no room for negotiation if you are out of compliance.
4. Scrutinise Line Items – Ask yourself – do I really need all these line items?
5. Negotiation Tactics – Microsoft do not respond very well to old school tactics, quoting them as evil, a monopoly, or referencing open source. What they do respond to is fact based analysis. For example “We have looked at your quote, we understand what you are offering, but don’t need XY and Z.” or rather “it has some value to us – but not at that price”.
6. Bundles – Be wary of bundling of items. Some examples;
7. Terminology – The Microsoft contracts are written in plain English and are better than most vendors but it is still easy to confused by licensing terms. I’ve been doing this since 1994 and I’m still picking up new things. If in doubt seek the advice of an independent professional. The ROI on the contract will easily justify it. If you don’t understand anything always ask for clarification and to see proof in writing.
8. Resellers – Your reseller is not necessarily fighting your corner. His ultimate allegiance is with the vendor. Ideally you need to work with your own internal licensing specialist, a consultant or independent licensing company.
9. Time – Take the time and appropriate resources to prepare for negotiation (Also see 3-steps-to-negotiating-software-agreements). Even small companies are potentially negotiating large amounts.
10. Be Bold – Finally, have the audacity to keep asking for more – right until the last minute!
If you have any tips or tricks on negotiating your software contracts please contact us.