I am not as enamored as Alan Pelz-Sharpe with the negotiating prowess of ECM sales reps. I rarely take issue with his commentary but in his recent post on ECM buying tips, Alan suggests customers should beware when going to the negotiating table against the superior abilities of big vendor account managers. I don’t disagree that these folks are professionals and sell for a living but I like to think that customers have a distinct advantage over the vendor and are equally bright and capable when informed. As customers you should never forget – you control the money.
The Path of Least Resistance
Life is miserable for technologists in corporations charged with acquiring software. They aren’t often trained to negotiate deals and the developer charged with installing the package is rarely the best one on your staff to review terms and conditions. I agree also that you should avoid buying more than you need but there is one major reason why ELA’s make sense to the customer. It limits how many times you have to talk to your own legal department. It is often cheaper (even with maintenance) to buy more than you need rather than to spend literally hundreds of additional hours required to push multiple purchases through.
The Good, The Bad and the Vendor
It’s unfortunate that what superficially seems like a bad business decision is actually motivated by well intentioned attempts at efficiency in the face of organizational politics. One of the key constraints to the expansion of new technology in a business is the red tape of the acquisition process. The account reps know it. The good ones work it to help craft deals that are mutually beneficial. The evil ones exploit their customer’s political turmoil to their own benefit with no regard for the impact to the people on the other side of the table. At the end of the day – it’s a character issue.
In my experience this is very much an individual rather than an institutional practice. I have had extraordinary relationships with reps in the past that were very much partnerships. They helped me navigate my own company’s treacherous waters and get the tools I needed to deliver for my users. I have also had to deal with the other extreme from the same vendor – These never lasted long because even if they closed a bad deal for me – I made sure they never got a second chance. Caveat emptor is only half the story – Caveat venditor when the buyer takes the time to be informed
A Rose By Any Other Name
I do have one major issue with ELA’s. Product name changes. Our friends in Documentum (now EMC) are famous for regularly running their product catalog through a cheese grater and renaming the slivers into separately licensed components. More than one company has bought the same product they already had covered in an ELA because of an cryptic name change in year two of the agreement. This creates an environment where ELA’s make the obfuscation of ownership not just easy but inevitable. Even the most benevolent salesmen won’t return a PO for something you bought 2 years ago.
I suppose informed negotiation is really the point of Alan’s post but as customers you should never surrender the high ground because of the perceived superiority of the salesman’s negotiating ability. It doesn’t matter where you are on the calendar either. Negotiating at the end of the quarter is not a mistake. The mistake is taking something you didn’t want as a concession in a negotiation. Additional seats is not a concession by definition. An example of an actual concession would be reducing per seat cost on the original order quantity. Additional line items at no initial upfront cost but with trailing maintenance should only be taken if you already have it on your technology roadmap or better if you have a project already on the books. (this one I learned the hard way)
Lee Dallas
Marko Sillanpää