Saving Money on Software Negotiations — Tips From Forrester's Duncan Jones (Part 3)

This post marks the final installment of a three-part series (see Part 1 here and Part 2 here) discussing software cost reduction tips with Forrester's Duncan Jones.

Jason: How is the maintenance paradigm changing?

Duncan: If you look at maintenance from a historical perspective, it's clear that companies are taking a different attitude to it today than in the past. In 2009, companies started looking critically at maintenance, setting examples. Consider that by cancelling a few maintenance contracts, others are encouraged to be more aggressive.

Jason: Could you illustrate this?

Duncan: I'll reference Sartre's commentary on the British Admiral John Byng. The English decided to hang Admiral Byng because he did not attack the enemy when he had the opportunity to do so. This was an example to other admirals. To paraphrase Sartre, he said that in England, they hang an admiral to set an example. There is a similar approach to pursuing software maintenance cost reduction as well.

Jason: Are there other techniques to employ?

Duncan: You can always approach smaller vendors first to obtain price cuts, and then use this as leverage with larger vendors. This can be difficult when it comes to negotiating in markets that are more closely controlled by suppliers (e.g., Oracle DB), but in others this type of leverage can work.

Jason: Can you go without support as an option?

Duncan: The answer is dependent. Many times you have little leverage to convince that you can go without support. For some applications, vendors know this is impossible (especially larger ones). [But] sometimes you can cut the fringe ones. The key is segmenting suppliers.

Jason: How do you do this?

Duncan: Companies must ask themselves, what happens when there is a problem? Is it business critical? Is it a bug we can live with? Are there engineers who can fix it on a time and materials basis? Or can we, entirely without support, depend on a community or alternative approach to solving problems when they arise?

Spend Matters would like to thank Duncan Jones for sharing his ideas on reducing enterprise software and maintenance costs. You can check out his latest and planned research on the subject on Forrester's site.

- Jason Busch

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.