Archive for September, 2009

IT cost savings are being reinvested

September 29th, 2009

According to a survey conducted on behalf of software supplier BMC, the majority of European organisations that have cut cost from IT operations are reinvesting those funds into strategic IT projects. The survey of 300 European IT decision makers found that 60% were reinvesting their cost savings strategically. This makes a lot of sense as strategic projects can pay dividends in helping businesses grow when economic conditions improve. While those businesses that just save money without reinvestment could lag behind when recovery begins. Every organisation is different and what they choose to do with their savings will depend on a number of factors. Reinvestment is one option. But so too is reducing IT costs such as software or hardware maintenance in order to use the savings to save jobs. Mark Bartrick, Managing Director of Silver Bullet Associates says “cutting IT costs is not hard; simply negotiate better deals with your IT suppliers”.

Negotiating with Oracle

September 21st, 2009

Oracle has blamed falling first quarter sales on the recession, currency shifts and weakness in resellers’ performance. The database specialist posted a 5% decline in revenues to $5.1bn but managed to increase profits 4% to $1.1bn. One example of reseller underperformance is quoted as SAP who is selling fewer databases because its application business is down. New Oracle software licence revenues were down 14% while technology licence revenues fell 19%, and software licence updates and product support revenues dropped 8%. Services turnover fell 18%. Keeping expenses in check was partly responsible for the small increase in profits. According to Oracle their sales pipeline continues to grow, although closing rates are more conservative. The firm reckons sales will drop 1% to 4% compared to a year ago. So if you have to negotiate a new or renewal deal with Oracle this year, then make sure you squeeze their sales rep (or their reseller) for every last drop of discount before you sign. They are under pressure to keep revenues moving forward, and it’s your money that they need to keep their commission stream flowing! If you are unsure of how to negotiate with Oracle, then let Silver Bullet Associates guide you through their sales maze.

Negotiating software virtualisation licences

September 14th, 2009

Many software vendors are now embracing licencing metrics that incorporate the requirements of a virtual environment. Oracle, Microsoft and IBM are just three of the many vendors who have accepted that they have to move away from tying their software licences to physical devices or processors. Licencing software in a virtual environment based on processors can add up fast so it’s a good idea to look at negotiating software licences based on named users.  Data volume is going up fast for many organisations which in turn requires more processors, even though the number of actual users may stay the same or actually be decreasing. And one other point; Silver Bullet Associates is aware that some suppliers support contracts are not written to incorporate virtual licences and could cause a cost problem when the supplier insists the client revert the support contract from virtual to physical licenses before addressing the original issue.

Contract renegotiation tips

September 7th, 2009

Every contract requires renegotiation when there are changes to your business environment or the contract reaches a renewal point or the supplier is taken over or merges with another entity. And renegotiation always throws up opportunities to improve the pricing and/or terms of the deal in your favour. Mark Bartrick, Managing Director of Silver Bullet Associates is a keen advocate of making the most out of every renegotiation and has saved his clients significant sums of money when contracts are renewed and renegotiated. Mark offers a few guideline below:

1/ Prepare well before contacting your supplier. Be clear about what you need and don’t need in any new contract. What has changed since the last contract was signed and what needs changing to mirror your current and future circumstances? Discuss the contract and its scope with your internal stakeholders. Define what you need, what you must have and what you’d like to achieve during the up-coming renegotiation.

2/ Within your organisation, agree who is going to do what and when. Define your timelines and allocate responsibilities and ownership. Get the right people involved who can make decisions. Be clear what your budget is at the outset. 

3/ Communicate clearly with your supplier; explain your expectations in terms of timescales and lines of acceptable communication.

4/ ‘What’s in it for me?’ Try to identify an incentive for the supplier. Don’t simply demand a price reduction with nothing in return. Find out what motivates them at the moment and see if you can find some common ground.

5/ Be clear what your walk away point is and what your alternatives are before commencing the renegotiation.

6/ If you don’t ask, you don’t get. It never hurts to get a ‘no’. But it always hurts to find out after the fact that you could have got a better deal if only you’d asked.

7/ If you have any doubt about the renegotiation, or are unsure whether your IT supplier is giving you their best deal, then contact Silver Bullet Associates and get an independant unbiased view from the renegotiation experts.