Gartner: Use Market Forces to Drive Licensing Negotiations

Gartner: Use Market Forces to Drive Licensing Negotiations

"Show me the money!" ~ Tom Cruise

I studied Economics at University many moons ago. So I felt a mixture of both fascination and nostalgia when Gartner Analyst Stewart Buchanan started using demand and supply curves to describe the business value of SAM.

I attended the London leg of the Gartner European briefings tour yesterday.

I got the impression that these events are for Gartner prospects to experience a taster of what the organization has to offer. As you would expect, there was a bit of showboating of Gartner’s capabilities but also considerable value.

In particular, I was intrigued by Stewart’s advice to use market forces to drive software licensing negotiations.

In Summary:

• Forget about supply. There is no scarcity in software when everything can be digitally produced.
• The classic vendor tactic is to drive up perceived needs (A) with aggressive bundling, blanket contracts and all-you-can-eat agreements. “Why not use standard builds and put our software on everyone’s desktops?” EA anyone? These agreements are designed for convenience (for you and the vendor) and ease of management but tend to leave the organization numb to their real requirements.
• Stewart advised to use demand-led tactics to force out the real value of business requirements. One quick way of doing this is to strictly adhere to budgets for all requirements. This soon shakes out any non-essentials.

Stewart Buchanan, Gartner

In a nutshell – Forget about what is available? What do we ACTUALLY need?

NO BRAINER SAM BUSINESS CASE

This makes a very compelling business case for SAM using this approach. Let’s hire a core team of 3 x SAM Specialists to work on the true requirements for just one large enterprise contract. Let’s say they cost the business £100K each and they result in £1M saving on one contract along. You do the math (I spoke to a SAM specialist yesterday who identified £5M savings in one year on his own).

This may all be procurement 101 – but procurement don’t (typically) know software, know software licensing or software demand and capabilities – so make sure they don’t muscle in and take all the glory!