2014 IT LICENSE PRICE RISES – HOW TO TACKLE IT NOW

Concorde Solutions warns organisations to beware the cloud when it comes to licensing, and always negotiate

Support for Windows XP finally came to a halt last month and many companies still using the operating system faced an inevitable realisation when upgrading: prices for IT assets have risen, a lot. Microsoft warned last year that 2014 and 2015 will see significant price rises, but while this can be a worry, there are some very simple ways to start to win the battle against it, suggests Martin Prendergast, CEO of Concorde Solutions.

Cloud computing, hosted software, services and infrastructure, as well as mobile working have also exacerbated the potential problems caused by these often complicated pricing structures. Prendergast said: “Microsoft itself is one step ahead of the curve, and replaced its three-year-old software licensing pricing structure with Server and Cloud Enrolment this January, encompassing the Windows Server and System Center. It’s my firm belief that other major and independent software providers will follow suit, and for many businesses it’s a complex issue that has to be monitored on an almost daily basis, because the cloud is so fluid in nature. It’s too easy to get caught out with either huge fines or large unnecessary over-payment on software that you don’t use.”

He expanded: “Price increases are never going to be an easy or popular thing to communicate; SAP experienced this back in 2008, when it declared it would move all its customers to its Enterprise Support package – a far costlier option. Its customers reacted angrily and various global SAP user groups complained long and loud, resulting in SAP relenting and allowing Standard and Premium support packages to remain.

“Sadly, not many businesses know how and why they should negotiate with vendors. Now is of course a good time to do so, as the end of the fiscal year rapidly approaches and IT budgets will be under pinpoint scrutiny. So trying to find cost-savings is more important than ever,’ Prendergast added.

He said: “Though negotiation appears daunting at first, there are some easy and perhaps even common sense steps that you can take to ensure you’re paying for the right amount of software licences that your business actually uses. Here follows my top tips,”

1. Know the exact size and make-up of your software estate. You can start your negotiations from a position of confidence if you’re making good use of your business intelligence

2. Understand what’s happening with mobile devices in your business. This can have a huge impact on your licensing position and can expose you to compliance risk, because BYOD is still a fledgling practice

3. Check the small print on your vendor contracts. Remember, software maintenance clauses are not compulsory or always necessary; they make a lot of money for vendors and you may easily be able to live without them

4. Don’t accept assumptions from vendors about your usage. You may be using less, not more, and automatic ‘true-up’ clauses in contracts may be bleeding your budget

5. If you’re making changes to your software estate, make use of scenario modelling. Get a clear picture of the impact of licensing, and communicate this to your vendor; you may need to spend less than you think