Non-discretionary IT spend is a top priority among CIOs, especially in software licensing and maintenance. However, a number of factors are driving up enterprise software costs.
These factors include software vendors’ vigilance in assuring every bit of revenue due to market pressures from declining software growth, high margins for software maintenance/technical support and still-maturing competition for enterprise-class secondary software support market. This makes diligently managing what are often surprise IT costs imperative. Successfully managing software license and maintenance spend involves two parallel paths of activity, including improving and securing favorable contract terms and conditions and implementing and sustaining effective management practices for software license and maintenance spend.
Path 1: Lock Down Favorable Contract Terms and Conditions
Shoring up the software procurement and contracting process is the first line of defense in controlling current and future software spend. To secure protections against at-risk areas for cost escalation:
*Address clauses that affect year-over-year escalation of pricing – As enterprise and desktop software is typically in service for 5-15 years or more, secure maintenance caps that are more closely aligned with the asset life of the software