Require contract benchmark for lower license cost?

Peter Wesche August 13, 2012

Most software vendors have a confidentiality clause in their boilerplate agreements that do not allow the buyers to share the commercial terms of the agreement. This practice reduces the ability to benchmark a contract to the few in your community that might verbally share their recent deals, or to calling on an expensive professional service that might not provide you with the details you are searching.

Now, there is an out to this dilemma: Internet-based self-service benchmarks for software procurement, as provided by License12 since early summer 2012:

Buyers or software asset managers are making use of a contract repository that can serve as a common base for everyone in the organization, to have all transactions at hand and to plot it to more than 2500 procurement datapoints. The benchmarks can be adjusted with respect to size, industry and region, to create a market insight on transaction or even on product levels.

  • David LubertAugust 29, 2012

    Insightful post but one question:
    “The idea sounds intriguing, but how do I turn knowledge about comparable deals into more discounts if my leverage is exhausted?”

  • PeterAugust 29, 2012

    From my past experience, I can offer three observations here:
    1. Every new information will add leverage of some sort.
    2. You own the details, your sales rep the general context. Challenging the details will let you understand when his/her willingness to look into details is exhausted, that’s when you start generating new leverage.
    3. The vendor wants your money, and if reliable information is in his way to get your money, he has to deal with it. In worst cases, I saw customers postpone the closure for more than one quarter with the repeated comment: You knew what it takes to close it!

    Otherwise, with no leverage at all, you cannot expect much.

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