Archive for 2010

2011; how to grow without extra funding

December 30th, 2010

The recession may be over, but the pressure to cut costs still weighs heavily over many CIOs and IT departments. According to Gartner, IT budgets fell by 10% this year. But unlike 2010 when it was all about survival and keeping the lights on, the pressures in 2011 will be about growth without increased spend. There will be an increased focus on improving services while making savings with existing spend in order to balance the books.

IT’s job will be as much financial management as it will be to provide IT services.

Contact Silver Bullet Associates if you want some help identifying software savings opportunities.

Merry Christmas to everyone

December 23rd, 2010

So this is Christmas and how much have you saved….another procurement year over and a new one about to begin. Everyone connected with Silver Bullet Associates wishes all our clients (past, current and future) a very merry Christmas. And as the economy hopefully eases its way out of recession, let’s look forward to a better year for everyone in 2011. May all your software negotiations be successful.

8 More Tips For Getting A Good Deal In Software Negotiations

December 16th, 2010

#1. Don’t spill the beans. Often, vendors talk to people at buying companies before the negotiations start, then gear the negotiation to the budget. The business ends up thinking they got a good deal, when they may have got another 20% off.

#2. Use your leverage. Let the vendor know it has a credible competitor, but not who it is. It’s also crucial that the negotiator understand the marketplace climate and the relative importance of the deal. Buying a large package from a vendor that’s coming off a poor financial quarter can work to your advantage. A vendor trying to break into your vertical industry may be willing to discount a product to get a foothold in a new area.

#3. Form the negotiating team early. Nothing kills more deals than bringing in the team at the last minute, but that’s what happens about 80% of the time. Too many companies think of contract negotiations in terms of price, when that’s a small component of the deal. Today, people are focused on price, but the risk and investment are a lot higher on the implementation agreement.

#4. Future-proof the deal. What happens if the vendor goes bankrupt, gets acquired, or doesn’t live up to the contract’s terms? Future-proofing a contract gives your business rights. First, escrow the software’s source code. Most times, when a business licenses software, they only get the object code, not the core source code. An escrow clause in the contract lets businesses obtain the core source code should the vendor go bankrupt or sell its assets.

#5. Take advantage of the here and now. Use current negotiations to get better prices on future software purchases. You may be able to get a deal for additional products purchased within the next few years at a pre-specified discount.

#6. Beware of hidden fees. Does your business have the right to relocate the software without penalty? If you need a copy of the software to test a disaster-recovery plan, are you required to pay full price for another license? Such hidden costs can add up to significant extra unbudgeted spend.

#7. Customisation can bite you in the end. Be as specific as possible about what’s being customised and how it should function. If you’re not very clear, the vendor won’t build it right. Vendors often will include a provision that says if a company doesn’t accept or reject the customization within 45 days, the customization is automatically accepted. That shouldn’t be the way it works. A company should have the right to refuse a customization whenever it doesn’t function properly.

#8. Know your definitions. How are you defining a user, a partner, or a customer?

Oracle awarded $1.3 billion in damages in SAP lawsuit

December 9th, 2010

There goes the bell…..

A jury has awarded Oracle US$1.3 billion in damages in its corporate theft lawsuit against SAP, a blow to the German applications vendor, which had argued it should pay no more than $40 million for the software stolen by its TomorrowNow subsidiary.

Oracle said it was “the largest amount ever awarded for software piracy.” Members of its legal team embraced as the verdict was read in the U.S. District Court in Oakland, California, according to a person in the courtroom. Closing arguments had been presented Monday afternoon, so the jury took less than a full day to reach its decision.

It was not the full amount Oracle had asked for, but still considerably more than SAP had said it should have to pay. Oracle CEO Larry Ellison testified two weeks ago that SAP should be made to pay as much as $4 billion to cover the cost of the stolen software.

Round 1 to Larry.

How to make IT procurement environmentally friendly

December 1st, 2010

When it comes to reducing some of the catastrophic problems caused by redundant IT, what matters is what’s in it, and how it’s put together. A company’s end-of-life processes are crucial when it comes to reducing the amount of kit that gets sent to landfill or illegally exported, but it is at the procurement stage where IT managers can flex their consumer muscle and help to bring about changes in the way IT is manufactured.

There are two ways for an organisation to introduce environmental elements to an IT procurement process. It could either research and write its own environmental requirements, or it could stipulate that the successful supplier will be a member of an environmental scheme such as Epeat, which rates electronic products according to their environmental attributes.  The idea is that each supplier will adhere to a certain standard of ethical manufacture, meaning buyers know how green the products are.

Large corporates and government organisations are often aware of the legal pitfalls of hazardous waste and of the PR nightmare that can ensue if you’re caught, and they deal with it properly as a result.”But small businesses who buy maybe 200 to 500 computers a year don’t have this reputational pressure. They might not realise they have liability.

So the message here is be careful, be diligent and check your supplier’s green credentials before accepting delivery of that next batch of hardware.

SAP still faces price and licensing issues

November 25th, 2010

The anger that exploded among users when SAP announced plans to impose a single, more expensive maintenance plan for all customers seems to have subsided a little in the light of a more conciliatory approach. Apparently, SAP has a new found willingness to listen, share and work more collaboratively with customers, particularly with regard to product roadmaps and establishing a two-way conversation with end-users.

Despite this progress, however, pricing and licensing remains a source of dissatisfaction for many of SAP’s customers. Without greater clarity and transparency around pricing, SAP could also run into problems with adoption of their new off-premise on-demand hybrid solution. Many suppliers have used complex pricing mechanisms to muddy their pricing models in order to confuse users and to enable higher costs to be charged. Let’s hope SAP really is listening this time as their current and historic pricing models have been unusually convoluted.

Microsoft juggernaut powers on

November 15th, 2010

Microsoft has seen net income increases 51% compared to same quarter prior year. It has reported revenue of $16.20bn for the quarter ended 30 September 2010, an increase of 25% compared to $12.92bn in the same period of the prior year. The increase in sales has been attributed to the robust consumer and corporate demands for the company’s Windows, Office and other products.

Operating income of $7.12b has been reported in the third quarter, which is an increase of 59% compared to $4.48bn in the same quarter prior year.

The deferred revenue of $1.47bn in the prior year was related to the Windows 7 Upgrade Option programme and sales of Windows 7 to OEMs and retailers before general availability in October 2009.

Without the deferral in the prior year, first-quarter growth rates for revenue and operating income were 13% and 20%, and growth in net income and earnings per share were 16% and 19%, respectively.

Microsoft chief financial officer Peter Klein said this was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games.

Microsoft chief operating officer Kevin Turner said the company is seeing improved business demand and adoption, and its enterprise agreement rates were strong, reflecting business commitment to Windows 7, Office 2010, and server and database products.

I guess Open Office and Google Apps still have some way to go before they impact the Microsoft juggernaut.

BMC software profits on the rise

November 8th, 2010

Cloud interest sends BMC profits up 40%. Business software firm BMC beat Wall Street expectations during its second quarter, recording a 9% rise in revenue and a 40% jump in profits. It’s another sign that the IT market is growing again and spending is on the up.

The firm said that demand for cloud computing and hybrid data centres pushed BMC to its impressive figures. Revenue came in at $502.3m, up 8.8% from $461.8m a year ago. Revenue was boosted by a 37% increase in professional services and a near-20% rise is revenue from licences.

“Cloud computing is fundamentally changing the way customers are thinking about IT. BMC’s strong performance shows that we understand how to make cloud computing a reality today,” said BMC CEO Bob Beauchamp.

Bob; you are right. It’s only taken you how many years to catch on with the industry trend?

Exploding iPads in the workplace

October 30th, 2010

Apple’s iPad has “exploded” on to the enterprise scene, according to industry watchers Forrester. Could this lead a decline in laptop and desktop PC sales? Well it’s certainly giving IT Directors something to think about.

Forrester’s report, called How iPads Enter The Workforce, says that iPads will make an impact at the office and its release has kick-started an “arms race for smart mobile devices,” with similar offerings including the Cisco Cius, Dell Streak, Samsung Galaxy Tab, RIM PlayBook, HP Windows 7 Tablet giving users greater choice than ever before.

Apple’s most recent financial figures revealed that the Cupertino, California-based giant sold 4.19 million iPads during Q4 2010. Added to the 3.2 million sold during its first quarter in the wild, Apple has shifted around 7.5 million iPads in just six months, which is not at all bad considering the iPhone sold between 3.5 – 4 million during its first six months on sale.

Software maintenance costs; are they worth it?

October 4th, 2010

Here’s one to get your mind juices flowing. According to Forrester Research, up to 80% of an enterprise IT budget is spent on maintaining existing investments. If you are a business paying a supplier £250,000 per annum for maintenance, are you getting good value for money? Most customers would say ‘no’. If you call for support  times a year that’s £50,000 per call. Is it worth that much? Probably not. And when you consider suppliers make up to 85% rofit margin on maintenance charges, it does suggest that maybe some maintenance contracts aren’t worth continuing with, especially if they product is end-of-lifeing or no longer business critical.