How to Deal with the Next Software Renewal Call from the Big Four Suppliers

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by | November 14, 2014

IT departments are being subjected to ruthless tactics by software sales teams when they renegotiate contracts with the big four suppliers – but the CIO can fight back.

Addressing delegates at the Gartner Symposium in Barcelona, Gartner research vice-president JoAnn Rosenberger said the big four mega-suppliers – IBM, Microsoft, SAP and Oracle – are the toughest to negotiate with.

“You are at a disadvantage because they have highly skilled legal teams, deal-makers and sales teams to negotiate software deals, whereas you may only renegotiate the contract every couple of years,” she said.

Gartner managing vice-president Alexa Bona said IT staff often feel locked into agreements with IBM, Microsoft, SAP and Oracle.

Moreover, according to Bona, changes in supplier licence agreements can lead to increased licence fees. For instance, a tweak in SAP licensing could lead to massive costs for CIOs.

“There have been massive changes to [SAP] licensing,” she said. “New pricing bundles mean SAP has eliminated light-user and shop-floor-user type licences, and is moving to revenue-based licensing.”



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