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NETWORK WORLD NEWSLETTER: AMY SCHURR ON IT LEADERSHIP
11/11/04
Today's focus: Software licensing negotiations

By Amy Schurr

In the last newsletter, we looked at tips for negotiating better
telecom deals. In this installment, we'll focus on another
expensive aspect of IT spending: software licensing.

Nancy Markle, president of the Society of Information Management
(SIM) IT professional association, shares her thoughts on
contract negotiation in a Network World article (
<http://www.nwfusion.com/careers/2004/0510man.html> ). She
recommends appointing a skilled chief negotiator and
establishing processes and procedures for all IT purchases that
exceed a certain dollar amount. Her other tips include building
flexibility and scalability into a contract and speaking to many
people involved with an implementation at a particular company
rather than just the one person there who agreed to serve as the
vendor's customer reference.

In order to negotiate an effective deal, you need to know the
lingo. Linda Musthaler outlines the pros and cons of perpetual,
subscription-based and utility-based licensing arrangements. Go
to
<http://www.nwfusion.com/columnists/2004/072604musthaler.html>
for her overview.

You may need to get the lawyers involved to review the contract
language and make sure your corporate interests are protected.
IT malpractice is on the rise (see
<http://www.nwfusion.com/careers/2002/0408man.html> ) as
consultants and vendors fail to deliver what they promised. It's
also smart to ask for source code escrow in case your vendor
goes belly up.

Legal types offer a variety of tips for software licensing
contracts at the following sites:

* Negotiating software license agreements in an economic
downturn
http://www.eletra.com/ggalert/e_article000080805.cfm

* Negotiating the software license: Eight tips for the licensee
http://www.nwfusion.com/nlitlead824

* Negotiating software contracts
http://www.smthacker.co.uk/negotiating_software_contracts.htm

* Ten tips for negotiating software license agreements
http://www.wnjip.com/E_Commerce_Spring_2002.html#Ten_Tips

Finally, don't forget that maintenance poses another big cost
component. Get tips on negotiating software maintenance
agreements for updates and revisions at
http://www.nwfusion.com/careers/2002/0218man.html

Copyright Network World, Inc., 2004

Questions or problems regarding this web site should be directed to abeckman@outdoorssite.com.

Copyright 2008 Art Beckman. All rights reserved.

Last Modified: March 9, 2008