Microsoft Aligns Its UK & Swiss Pricing With The Rest Of Europe, But Not, Alas, With US

Microsoft recently announced that it will change to its European currency pricing policy from July 2012, and the effect could be a 20% price increase for UK customers. It didn’t publicize the change, preferring to let its resellers tell their customers as and when the change affects them, so I thought I’d tell my readers what you need to know. Firstly, here is some background. Most global software companies have one master price list in their home currency and reset price lists in other currencies every year or even every quarter using then-current exchange rates. Microsoft has always taken a different approach, having set €, £, and other prices in 2001 and continuing to use the same exchange rate ever since. There are pros and cons to this approach:

·         Pro: local prices are stable and predictable. In contrast, € and £ prices from other US-based vendors may rise or fall by 20% from one year to the next as the currencies fluctuate. (This is one reason why SAP’s revenue rises and Oracle’s falls when the € weakens against the $, as these price changes affect demand.)

·         Con: European companies pay more than their US-based peers. This doesn’t matter so much if you’re only competing with domestic rivals, but global companies see and resent the discrepancies.

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Is This The End Of India's IT Services Success Story?

I’m currently working on a report entitled “IP-Based Solutions Will Transform The Global IT Services Industry.” In a nutshell, I believe that the business model of IT services firms (consulting firms, systems integrators, and outsourcing firms) will transform from a traditional human capital-intensive model to a software capital-intensive model over the next five years. As I will detail in my report, I believe this transformation will have far-reaching implications on the IT services firms’ organizations, including their sales, marketing, portfolio management, and delivery capabilities.

As I’m based in India, I also see this change as a major disruption for India’s export-oriented IT services industry (AKA “offshore services”). I believe that the growth model for India’s IT/ITeS industry’s in the next 20 years will be much different than it has been for the past 20 years. Software assets — what I also call IP-based solutions — will become critical to the competitiveness of the Indian IT services industry. The recent investments of companies like Infosys, HCL, and NIIT Technologies in such IP-based offerings are strong proof points.

This means a couple of things for the Indian industry:

  • The Indian IT/ITeS industry will create far fewer jobs than in the past. This is what some Indian firms refer to as “non-linear” business models.
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新年快樂. Ancient Chinese Negotiation Tactics, In Honour Of The Chinese New Year

I’m always searching for new negotiation best practices and tips when I’m speaking with Forrester clients, but it's not often I find one when I’m relaxing in bed with an old favourite, recently rediscovered book. But here’s one that I hope you’ll find amusing, and educational, from a book written over 80 years ago.

The current Mrs. Jones did some “tidying up” over Christmas — her euphemism for moving my stuff from its organized filing places in her office and dumping it as a jumbled pile on the floor of my office. In amongst a number of unwanted books and DVDs, now available at very reasonable prices on Amazon, I found my ancient copy of Kai Lung Unrolls His Mat by Ernest Bramah. It’s a wonderful book — set in China at some unspecified date in history — and written, so the preface claims, in that country’s classical convoluted style replete with analogies, adjectives, and apophthegms[i]. Read this passage about the ivory carver, Chan Chun, and his lowly assistant, Kin Weng, buying some new tusks from the merchant Pun Kwan — I hope you’ll love it as much as I do.

Pun Kwan and Chan Chun began slowly to approach, the former person endeavouring to create the illusion that he was hastening away, without in reality increasing his distance from the other, while the latter one was concerned in an attempt to present an attitude of unbending no-concern while actuated by a fixed determination not to allow Pun Kwan to pass beyond recall. Thus they reached Kin’s presence, where they paused, the sight of the outer door filling them both with apprehension.

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Software Audits: A Story Of Home Truths, Horror Stories, And Money

Software audits are a bit like public transport; you can wait for ages for a bus and nothing turns up and then all of a sudden five come along at the same time. It shouldn’t surprise anyone that software vendors are running more licensing audits today than ever before. The challenging economic climate has driven down the volume of new license sales for many vendors, so they are looking to backfill that revenue gap by auditing their clients and by finding which ones are using more licenses than they actually purchased.

Looking at Forrester’s inquiries over the last few years, we can see a steady increase in calls asking for help with a Software Audit. The main vendors we see active in the software auditing space at the moment are IBM, Microsoft, Oracle, and SAP. That’s not surprising, as they’re the major software vendors overall. More clients means more audits. And audits certainly aren’t limited to these players; vendors of all sizes are auditing.

But software audits don’t need to be a horror show. If you are well prepared for an audit and have good Software Asset Management procedures in place then you should have nothing to fear. If you aren’t prepared, perhaps in blissful denial that such an event would happen to you, then let this be a warning; in the software audit space, no one can hear you scream.

Un-licensed software usage is easy to miss. There are many potential causes but the outcome is usually the same; you owe more money to the software vendor!

So be prepared. And preparation starts with this: once the audit request arrives make sure you:

  • Understand the vendor’s Audit process
  • Establish a single point of contact within your organization
  • Establish your audit team
  • Get ahead of the audit by thoroughly reviewing your license entitlements and your actual usage before the Vendor’s audit team arrives
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Is Dell Finally Ready To Strengthen Its IT Services Activities?

In an interview with the Economic Times in India, Dell announced yesterday that it was readying a war chest of about US$1 billion for IT services related acquisitions in India. Here is why I think this announcement is important for Dell:

First, Dell needs to continue strengthen its global delivery network and industrialization capabilities. Dell bolstered its IT services market position with the Perot Systems acquisition in 2009. Since then, the company has made clear its development ambitions in India from an offshore perspective — including during the first analyst event they hosted in India in September 2011. The company lags far behind the services behemoths, including IBM, which has more than 100,000 staff in India working for international clients.

The India domestic market is also becoming a top priority for all major tech vendors. Forrester expects this market to grow by 20% in 2012 in local currency (see my recent report on the future of IT services in India). Japanese companies like NTT Data have launched aggressive inorganic growth strategies to tap this booming market (Dimension Data in 2010 — which was at the time part of the top 10 IT services firms in India via its Datacraft subsidiary — and more recently Netmagic Solutions). And Forrester expects more Japanese investments in the coming few months.

While IBM, HP, and Wipro Infotech are leading the IT services market in India, Dell is still marginal in terms of system integration and managed services activities. So it’s high time that Dell strengthens its presence in India.

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