When dealing with a vendor like Oracle, a simple way to get off on the right foot with your licensing agreement is to develop an RFP or a Request for Quotation that outlines your specific business needs. Any changes made in terms of your needs should be identified by the vendor and they should also provide cost differentials for each set of terms based on individual scenarios. 

Getting the terms out of the way before you even choose a vendor or begin to draft an agreement can make the process much smoother and have you come out better in the end.  Knowing your needs is the key – additionally, when the software licensing agreement is drafted, it should include a statement of your business objectives, creating a touchstone for future negotiations. Licensing — whether Oracle licensing or Microsoft licensing — can be complex. Added to the complexity is the nuances of your business. So, include a statement of your business objectives for the acquisition in the agreement. This creates a touchstone for negotiating other terms and for implementing and interpreting the agreement later on.

Work plan?  What’s that? Two common questions that you’ll often find whenever companies are dealing with software licensing.

Before entering into any contract with a software vendor it’s important to have a generic work plan that will guarantee that deliverables are met once your license agreement goes into effect.

It’s important to have the immediate deliverables in writing as well as a schedule of items that need to be completed even after the contract is signed. The work plan will take time on both yours and the vendor’s part, but it’s a way to insure that you are getting what you need for your business at the contracted price, in addition to having it implemented in a timely fashion.

At the very least, be sure to have an agreement on an installation completion date and key deliverables with the option of termination, should the terms not be met.

In any negotiation it’s always a good idea to consult a professional to insure you get the best deal and your needs are met.

Software Licensing Agreements, be it Oracle, Microsoft or Adobe, can at times read like a foreign language. We thought we would pass along some tips that can help when making a large software purchase. First and foremost, it’s almost always a mistake to accept the vendor’s standard agreement.

The SLA should be specified to your business needs and as specific as possible – the standard agreement lacks a lot of this information – make the vendor work for your business by specializing the agreement. This will also help you plan for the future.

The standard agreement is meant to protect and benefit the vendor, your agreement needs to fit your needs and protect your business.

Gartner analyst William Snyder addressed software licensing at the Gartner Emerging Technologies Conference a little over a week ago, highlighting that software profit margins will erode, pricing will increase, all due to the fact that only a few big players exist in the market creating a oligopoly. Software budgets are continually under pressure from CEOs hoping to use a large portion to invest in new technology, when in reality they end up blowing their whole budgets on maintenance and licensing fees.

Snyder points out that evolutions like BPO or Business Process Outsourcing and open source will be what puts a dent in the software market. Negotiation with software vendors will change when there are more options. Oracle and SAP will be competing with outsourced solutions that will allow companies to utilize advanced applications without the headaches of maintenance. 

We’ll keep an eye out to see if Snyder predictions have any legs – he predicts software licensing margins to decrease as markets move toward open source and SaaS.  Our guess is that it’s doubtful that licensing – such as Oracle licensing – will go away.  ERP systems like Oracle, SAP and Microsoft are part of the life’s blood that keeps companies functioning.  To remove it would be as painful as removing and replacing a body’s blood vessels.

In the News This Week

· IT Jungle Will Bloat and Complexity Get the Best of Windows? Probably NotSAP Raises Software Maintenance Fees for New Customers

Last year, Google collected less than $200 million from software licensing while raking in $16.4 billion from advertising sales.

I’m a little late to the Patch Tuesday party.  But with 41 patches available from Oracle including 17 for Oracle’s database product, we’ve been inundated with inquiries and busy at Collaborate 2008.  This is a big ouch for many companies!  If you want to read more:

InternetNews.com Oracle Plugs 41 Security Flaws

SC Magazine Oracle closes 41 vulnerabilities, 17 in its database

The Register Oracle patches ’sitting duck’ database vulns

eWeek Oracle Issues 41 Security Fixes in Latest CPU

ZD Net Oracle patches DB, apps

InfoWorld Oracle patches 41 security flaws in database, other products

CRN Oracle To Serve Up 41 Patches Next Tuesday

I just got word last week that I’m confirmed to speak on October 17 at the IAITAM 2008 Annual Conference & Exhibition on vendor relations.  I’ve decided to focus my presentation Microsoft and Oracle licensing best practices; how to negotiate a better deal and top 10 tips to software asset management.  I may even present a case study or two.

BSA sure knows how to incentivize people to stamp out software pirates.  In an effort to capture these “pirates,” BSA announced the expansion of their $1 million dollar reward program to include the illegal sale of software over the Internet, such as auctions of unlicensed software.

BSA has already paid out $58,000 in reward money to just 14 individuals who have reported software piracy.  A majority of the reporting comes from within an organization, from employees in their current or former workplaces.

Just another reason why software licensing & compliance is a serious issue. Disgruntled employees will surely seek out a piece of the million dollar pie to turn you in! The sad thing is that many of these offenders may not even be aware of it – be sure that software vendors do and will not take pity on those out of compliance.

In the News This Week

      ·     Baseline Symantec`s Midnight at the Oasis

Oracle announced that it would release patches for a number of product including critical database fixes this coming week.  Oracle plans to release 40+ patches on Tuesday.  Security vulnerabilities addressed by this Critical Patch Update affect the following products:

I predict a lot of Oracle DBAs will be busy these next few months.