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Negotiate the best software support agreement for a new IT tool

An IT tool's support contract could make the difference between an indispensable part of the DevOps process flow or a costly, rarely used relic. Just read all the fine print.

You've done the main part of the work: creating a shortlist of software tools and carrying out a bakeoff of functionality. With your due diligence complete, a choice is made at a technical level as to which IT tool is best for the job.

All that is required now is to get in touch with the software vendor or its channel representative, figure out an appropriate software support agreement and do the deal. Nothing could be simpler, eh?

A technical specialist might reasonably enjoy the period of IT software selection. It's a chance to play with sets of tools and try them out, looking at what works and what doesn't. They have training and experience to determine which IT tool suits the organization's needs, complies with regulations and will scale with growth. Software support agreements are financial and require negotiation skills -- things that aren't in an IT professional's wheelhouse.

Organizations ready to invest in new IT tools must set expectations for support and cost as part of tool selection, with eyes wide open. Free, open source software has its place in the world, but free is often a misnomer. Commercial off-the-shelf (COTS) software has an associated cost for the technology, but this should not be the major focus. Do not get caught up in an ideological COTS vs. open source war -- it is all down to whether you end up with the right tool for the job.

Software support

Open source technologies lose the free designation when you pay for support. It is possible to use purely free open source technologies and support them with your own internal team, but think of the organization you work for -- if you choose to leave, who will continue to support what you implemented? A software support agreement should always top the priority list.

It is often far more cost-effective to include upgrade costs in the software support agreement, rather than being faced with a massive uplift cost when there are major version changes.

The appropriate level of support depends on what chosen tools do. In many cases, a patch support contract with basic telephone and email contacts from the vendor or integrator is enough. In others, a guaranteed response time of four business hours or the next working day is necessary, due to the software tool's important job within the IT organization. To ensure that you get the right level of support, involve your company: How important do they believe the tool to be?

Don't forget upgrades. It is often far more cost-effective to include upgrade costs in the software support agreement, rather than being faced with a massive uplift cost when there are major version changes.

What licenses are involved

With COTS software, licensing can be quite simple. The user pays a base license cost and then a yearly maintenance charge for continued support. There will be variations -- per-user licenses, with different roles, where savings can come from choosing the right user role license; enterprise licenses; volume licenses; and so on -- but overall, COTS software licenses are a known entity with a lot of resources available to help customers fully understand what they are getting.

Open source IT tool licensing is different. You can download the free version from the web and use it as you see fit. You can even change the code to fit exactly what you want the software to do. However, there are gotchas. The Open Source Initiative, a nonprofit corporation dedicated to the open source definition and licenses conformant thereto, lists those licenses accepted by the community. Each one comes with its own terms and conditions as to how the license can be used.

Enterprises concerned about how they support software and comply with license agreements should evaluate software asset license and lifecycle management (SAM) technologies. Black Duck provides a means of checking code and platforms for free open source software licenses. Flexera and Snow Software are two major SAM vendors with products that discover, identify and manage a range of license types. Not only will SAM tools ensure that the organization keeps within agreed contractual license limits, they also provide a wealth of information to aid in support agreement renegotiation.

Cost and all it entails

Cost is a small word and a huge topic. Perhaps the tool vendor's website says $100 per person per month or $1,000 per installation. A vendor's salesperson is more than happy to sell at those prices but is also likely to offer a discount. At the basic level are standard volume prices, where the price drops once the customer exceeds a number of licenses.

Like so many things in life, if you don't ask, you don't receive. Offer less money per license, such as 60% of the list price. If you represent a large enough company, it is likely that you'll get a discount in that range. Even as a small company or a tool with limited rollout, discounts should be available.

Use the same approach to negotiate maintenance in a software support agreement. There is little reason to settle for 17% to 22% of the original list price license cost on an ongoing basis.

Read every word

Finally, and most painfully for the technical crowd: Someone has to RTFC -- read the flipping contract. Vendors love the small print in support agreements. A person with legal expertise needs to go through the final document with a fine-tooth comb to identify the sections that demand a sacrifice of the head of IT's firstborn.

Overall, don't just jump to sign a support agreement for a software tool, even if only one or two people in IT will use it. You owe it to your company to ensure that you reach a good deal, but also bear in mind that negotiations take time. Three days spent haggling for a $10 discount on a $100 piece of software is, literally, a waste of time.

Next Steps

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This was last published in July 2017

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