Five things your Microsoft sales person doesn’t want you to know

Mark Bartrick

I love Costa Coffee shops. Not only do they keep my caffeine levels sustained but their ambience always seems to get my creative juices flowing. Here’s one of my more recent ruminations: wouldn’t it be great if software companies always did the right thing for their customers?

Imagine this world for a moment:

●     Software vendors only ever selling you what you need.

●     Software vendors offering pricing and discounting that is always fair, logical, and transparent.

●     Software vendor sales people who openly admit that a competitive product may actually be a better fit for their customer as opposed to trying to shoehorn in their own products at every opportunity.

Unfortunately that’s not the way the software world works — at least not for the mega vendors.

And speaking of mega vendors, Microsoft’s fiscal year wraps up at the end of June so I thought it would be timely to share with you some insight into what you might soon be facing. Here are five things that your Microsoft sales person doesn’t want you to know:

1.       Enterprise Agreement price hikes: If you have an Enterprise Agreement (EA) renewal coming up then Microsoft will be expecting to dump a price hike on you of at least 10%. This is because your EA price-locked your Microsoft products when you signed it, and it has protected you from all the various product price rises that have occurred in the last three years. But when you renew your EA, all those lovely price rises catch up and form the basis of how your next EA is priced. Hence the hike.

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Workday Continues to Disrupt HCM and Financial Software Markets

Joe Galuszka

This is the third post in a series on strategies and tactics for negotiating your licensing agreements with software companies including SAP, Salesforce, and Workday.

Forrester’s analysts and consultants are seeing an increase in the number of project discussions regarding Workday’s SaaS solutions as we enter the fourth quarter of the calendar year. Two significant factors are contributing to our clients’ interest:

  • The growing market momentum of Workday’s SaaS solutions as a competitive replacement to existing legacy on-premise Human Capital Management (HCM) applications and/or as a competitive option to other pure-play SaaS solutions.
  • Potential end-of-year budget spend / acquisition opportunities, which we believe will actually continue through Workday’s fiscal year end on January 31, 2016.
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As Salesforce, The SaaS Behemoth Grows, So Does Pressure On Deals

Liz Herbert

This is the second post in a series on strategies and tactics for negotiating your licensing agreements with software companies including SAP, Salesforce, and Workday.

Salesforce is coming off of another banner H1 and monumental customer event, Dreamforce ’15. The SaaS giant continues its meteoric rise — now into full-blown CRM, Internet of Things (IoT), and broader platform use cases. Customers remain excited and enthusiastic about Salesforce’s potential to transform their business, and they continue to adopt more and more of the Salesforce portfolio.

This continued growth has also meant a greater deal scrutiny by customers big and small. Although Salesforce famously built its business by going direct to line of business leaders -- flying under the radar of corporate procurement and IT -- those days are coming to an end. Salesforce’s growing deal sizes and newfound position as a mission-critical, strategic platform have caught the attention of sourcing and procurement professionals, IT leaders, CFOs, and even CEOs and Boards of Directors.

As you think about your relationship with Salesforce and prepare for negotiations, here are some tips to consider:

  1. Have a thorough understanding of your current and future Salesforce usage. This will inform an appropriate and fair deal that you won’t outgrow too quickly.
  2. Remember that deal structure and contract terms and conditions are critical. It’s not just about your price or the discounts negotiated, but also the business value your company is receiving.
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3 Ways To Squeeze Your SAP Maintenance Costs

Mark Bartrick

This is the first post in a series on strategies and tactics for negotiating your licensing agreements with software companies including SAP, Salesforce, and Workday

I recently had a call from an unhappy SAP customer moaning about the high costs of SAP’s annual maintenance and questioning whether they are getting good value for the money. I’m afraid that this is not a one-off conversation but something that is popping up regularly these days. The factors leading to the dissatisfaction include:

  • CIOs are keen to shift spend from boring legacy IT like paying maintenance on infrastructure to new, more exciting stuff — what Forrester calls business technology — that help win, serve and retain customers.
  • Hard economic times re-focus procurement’s lens back on to those large chunks of money that vendors want for maintenance.
  • SAP has been increasing maintenance costs to try to get everyone paying 22% of the net license costs each year.
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Five Shades Of Grey (How software buyers and license managers should be compliant without being submissive).

Duncan Jones

Any procurement or asset management professionals who have seen the new movie based on E.L.James’ best selling novels may have noticed the similarity between the eponymous antihero and a license management services consultant.  Mr. Grey will use charm and threats to persuade you to run his audit scripts on your network. You have an obligation to demonstrate your compliance with the software license terms, but that doesn't mean that you have accept his opinion about what those terms actually mean.

Sources inside some large software companies tell me that license audits generate 20% to 30% of their license revenue. Although a lot of that will represent deliberate or reckless under-licensing, many of the disputes that I hear about involve software salespeople abusing some licensing shades of grey to pressurize customers into paying them money. It is difficult to predict how a court will interpret nineties contract language in the current technology context, so many companies pay up rather than risk a compliance lawsuit. Here are five questions of interpretation that no lawyer can answer:

  1. Who is really using my software? I continue to hear risible interpretations of ‘use’ and ‘access’, such as the software company that claimed motorists were users because they saw output from its database when they drove past an electronic road sign. I’ve previously suggested a standard interpretation of use in my report Let's Clear Up The "Indirect Access" Mess based on the concept of interaction - i.e. both input by a user and output by the software. Enterprises need to persuade their vendors to accept this interpretation urgently, otherwise the Internet Of Things will bankrupt you.
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Microsoft’s Cleans Its Windows Licensing To Reveal The Path To BYOD

Duncan Jones

Today’s announcement by Microsoft of a per-user subscription licensing (USL) option for Windows is significant, and good, news for its customers. I’ve been telling Microsoft product managers for years to phase out their obsolete per-device licensing models, and this is a major step in that direction. it marks a major change in Microsoft’s attitude to bring-your-own-device (BYOD) programs involving non-Windows devices such as Apple Macs and Android tablets.

Source: Microsoft

Previously Microsoft tried to discourage customers from using virtual desktop infrastructure (VDI) on top of rival operating systems by applying complex licensing rules involving various TLAs such as RUR, VDA and CSL (which I’m not going to explain here, because they are, thankfully, no longer needed). The USL is far simpler - clear Windows licensing replacing translucent frosted glass, so to speak.

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Five Unique Customer Benefits Of The SaaS Model: Learnings From Workday Customers

Liz Herbert
Clients tell us they are turning to SaaS not so much for cost savings but primarily for greater business results: greater business agility and improved collaboration inside and outside the enterprise. But, what can SaaS applications provide that traditional, single tenant applications cannot?
 
At last week’s Workday Technology Summit, we heard firsthand from some major brands about the unique benefits they are achieving from using a SaaS solution:
 
1. Continuous innovation. Workday customers talked about two components to this benefit: 1) seamless, frequent, automatic upgrades and 2) ability to deploy changes quickly into your live environment.  
 
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Big Data Adoption In Hong Kong Lags Behind Mainland China By At Least 18 Months

Gene Cao

I was invited to speak at the Big Data and Business Analytics Forum in Hong Kong last week, and introduced our latest research on big data in Asia Pacific for both marketing and technology management professionals in the age of the customer. Listening to other speakers at the event who discussed Hadoop and explained the 4Vs of big data — volume, velocity, variety, and value — it dawned on me that there may be a significant gap in big data development between mainland China and Hong Kong. While Hong Kong is perceived as more technologically advanced, these terms were already buzzwords on the mainland 18 months ago. There are several constraints could have hindered big data adoption in Hong Kong:

  • Demographic limitations. With a total population of 7 million, Hong Kong doesn’t generate data volumes as gigantic as mainland China’s. This raises the unit cost of big data for Hong Kong businesses.
  • Budget to invest in new technologies. Hong Kong businesses are still struggling to recover from the 2008 financial crisis and maintain hiring freezes. It’s difficult for tech management to convince business leaders to invest over HK$1 million in a big data project and hire data scientists.
  • There are few local practices in unstructured data like social, location, and mobile. Hong Kong is open to global social platforms like Facebook or Twitter, meaning that multinationals can use global big data solutions to cover social in Hong Kong and keeping local adoption of big data technology for SoLoMo low.
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Service Differentiation Kicks JD.com’s Business Growth Into Top Gear

Gene Cao

Contributed by Bryan Wang, Di Jin, and Vanessa Zeng

JD.com, the second largest online retailer in China, went public on May 22, listing itself on Nasdaq after merely 11 years of existence. At the time of IPO, JD had a market value of nearly $30 billion. Despite its size however, JD still managed to increase its customer base by 62% in 2013. How did JD manage to continually achieve business growth? I believe this is due to three key factors that differentiate JD:

■  Comprehensive logistics network for online retail in China. JD.com invested heavily in a last-mile strategy to ensure that customers receive products as quickly as possible, establishing 82 local warehouses with 1,620 delivery and 214 pickup stations across nearly 500 cities in China. This has made same-day delivery available in 43 cities — far ahead of the capabilities of Google Shopping Express in San Francisco. To better reach customers in lower-tier cities, JD is also collaborating with local convenience store chains in provinces like Shanxi and Guangdong to further strengthen its last-mile delivery capability.

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Cisco Extends Its Data And Analytics Capabilities At Its Annual Cisco Live Event

Gene Cao

At the Cisco Live Event 2014 in San Francisco last week, we heard about plenty of updates, extensions, and new acquisitions to expand the business. The major technologies highlighted were InterCloud, Application Centric Infrastructure (ACI), and the Internet of Everything (IoE). Among these new offerings, I reveal that Cisco’s extended big data and analytics capabilities excited me the most. Why? Because its data virtualization techniques can help customers easily analyze large volumes of virtual data, no matter where it physically resides; enhanced video analytics technology could improve the customer experience when checking out in retail stores or waiting for a train; while IoE analytics and digital intelligence increase customer engagement.

  • Data virtualization supports big data analytics. End user organizations realize the importance of quickly and carefully making decisions; to do this, they plan to centralize data from different branch offices or departments. Consolidating data that resides in multiple systems and in global locations — or that is locked away in spreadsheets — is expensive. For example, telecom operators in China have hundreds of millions subscribers and need to consolidate and analyze this customer data — but it resides in 31 provincial companies. Data consolidation will be a huge and expensive project, but data virtualization technology can help solve this problem. Customers could consider adding Cisco to their data virtualization vendor shortlist, especially given Cisco’s acquisition of Composite Software last July.
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