Software vendors are waking up to the fact that software negotiations aren't one-sided anymore. In fact, small and mid-sized businesses may even be able to use conditions in the software market to their advantage and gain the upper hand.
The fact that software is now being sold over the Web as a service, combined with the growth of the open-source movement, has sent the cost of a lot software lower -- in fact, some programs that small businesses can use are even free. Meanwhile, competition in the software market is booming.
There are "some incredibly fast-growing software vendors that are building a better mousetrap and no one knows about them," says Michael G. Oxley, former US Congressmen (R-OH), and co-author of the Sarbanes-Oxley Act of 2002 (SOX), which requires public companies to certify the integrity of their financial records, is now an attorney with Baker Hostetler in Washington, D.C. Oxley says that software companies need to take advantage of the proliferation of software vendors out on the market today.
Vendor selection smarts
Although IT managers may not have as much experience as a sales rep when it comes to the negotiation conversation, a few key pointers can make all the difference for gaining favorable contract and license terms.
Start with a wide field and then narrow it down. Once you have two prime candidates, you can start the negotiations. Your goal should be a contract that allows for growth, flexibility, and price protection. Just hold your cards close so that you're not giving away your bargaining chips.
What you should try to demand
Both Wang and Oxley agree that it's important to hire legal counsel whenever there's a contract involved, but having extensive knowledge about the negotiation process will help you get the best possible deal since IT managers work directly with all involved parties.
Draft your own contract
Although writing your own contract is a lot more work that using the one provided by the vendor, the results will be worth the time and effort.
In today's economy, IT managers are the go-to people to solve business and technology issues, as they are the ones who understand their software's lifecycle best. It's crucial that IT managers understand the importance of education, research, and discussions amongst their peers to make wise software choices and save money for their businesses.