Users fed up over software licensing, pricing tactics

Forrester suggests that IT improve negotiating skills, consider hosted systems, third-party services

Corporate software users are losing patience over complicated licensing and pricing schemes, maintaining that they do not fit their business goals, according to the recently released results of a Forrester Research survey.

The survey of 215 business process and applications professionals found that users are frustrated by escalating maintenance costs and complex licensing and pricing schemes. Users are seeking simpler pricing language and clearer expense, discount and licensing provisions

On average, the respondents said that their annual maintenance costs are 26 per cent of licensing fees, according to the report.

Ray Wang, an analyst at Forrester, noted that corporate users are paying too much for enterprise applications and maintenance, but he said that IT buyers can cut those costs by better negotiating with their vendors.

He noted that businesses can significantly improve their negotiating leverage by cutting unneeded features from requirements lists. Companies should also look to negotiate long-term corporate discounts and make sure that vendors stand by them.

"The whole point of buying a perpetual license was not to be beholden to the vendor," Wang said. "Vendors are trying to create even more dependencies for clients. That defeats the whole point of keeping the software as an asset you can utilize as you need."

Forrester said that corporate users can best respond to vendors they feel are unfair by turning to alternative software-delivery methods, such as hosted systems or third-party maintenance companies.

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