Tag Archives: microsoft

Tick, Tock – Timing is Essential to Contract Renewal Leverage

Steven Lytle Blog

Steven Lytle, Managing Consultant – 

The end of a contract term can be an ideal time to take advantage of new product offerings, pricing structures and technology innovation. But starting early is essential to an effective renewal strategy. Clients need time to engage business and technical teams to thoroughly assess new products against requirements and to effectively leverage the negotiation process to get optimal terms and conditions.

Early attention to renewal can also prevent unpleasant surprises, particularly for Microsoft customers who use an “honor system” of self-reporting estimated year-on-year growth of assets.  While rough guesstimates of asset growth are easily done, a detailed inventory is a time-consuming process. If a customer comes to a renewal discussion poorly prepared and conveys doubt and uncertainty regarding specifics on software assets and licensed users, that customer will likely be tagged as a prime candidate for a software audit – which can be an expensive and onerous proposition.

Given the importance of early attention to the renewal process, customers surprisingly often find themselves running out of time and coming down to the wire when a contract is due for renewal. If deadlines are looming and customers’ backs are to the wall, they often have to settle for a sub-par agreement. Or worse, leave themselves vulnerable to a potentially costly compliance review.

Why the foot-dragging? One reason is simple inertia and basic human nature – customers see that their renewal is due in, say, eight months, and make a note to set up a meeting with their vendors to assess their options to add new capabilities and optimize spend. However, other projects and priorities arise and, best intentions notwithstanding, next thing they know the renewal is due in a month and they haven’t prepared.

But procrastination is not the only factor at play. When negotiations are done in a last-minute, deadline-driven manner, vendors own the leverage and are better positioned to drive the outcome in their favor. This means vendors have a vested interest in delaying the process as much as possible. Typical stalling tactics are subtle and seemingly benign – “I need to get back to you,” or, “We need to have Joe involved and he’s on vacation for two weeks.”

Subtle or not, customers need to be prepared. The basic message: prepare for the renewal process well in advance of the contract termination date. Six months out is a good place to start. Equally important: assume that your vendor team will be in no mad rush to get things done and pad schedules accordingly.  Renewals of larger deals should be a priority, and ensuring involvement of the right mix of individuals is imperative.

Negotiating leverage is key to any contract discussion. For customers renewing software agreements, the longer they wait, the more that leverage slips away.

Good Microsoft Customers Beware

Louis Pellegrino Blog

Louis Pellegrino, Director – 

If you’re a loyal Microsoft Enterprise customer, you’ve likely exercised your option to leverage volume licensing agreements. You’ve diligently taken advantage of new offerings, and your environment is a poster child of Microsoft products.

Be careful.

The trouble is, Microsoft account teams are assigned aggressively high bars to grow revenue. In Microsoft’s view, there’s no such thing as a saturated customer. More specifically, there’s no such thing as a customer who shouldn’t produce more revenue this year than the year before.

If you already have a significant installed base of products, your Microsoft account team will likely focus on selling you myriad high-edition value-added products, or they will pressure you to convert your on-premises workloads to their Cloud Services.  If you dutifully sign on and acquire these upgrades, or if you move hastily to online, there’s a good chance you won’t use many of the features, which means you’ll be buying capability you don’t need.

If, on the other hand, you push back and say your existing product suite is adequate for your needs, you will very likely become targeted for a software audit aimed at identifying unauthorized use of licenses and assets and extracting significant fines and penalties.

While audits of enterprise software customers were traditionally an exception, that has changed, and today all software publishers increasingly rely on audits to fill revenue pipelines depleted by declining sales of new products.  For large and established Microsoft customers, the risk is especially high because, by virtue of their size and scope, they are by definition targeted to produce significant revenue growth.

Customers can regain control of their relationship with Microsoft and other software providers by demonstrating compliance and complete and detailed oversight of their software assets.  Equipped with a detailed inventory of volume licensing agreements, deployment landscape and purchase history, you can respond to an audit with confidence, strengthen your negotiation position and improve your relationship.

Check out a recording of a recent Alsbridge webinar that discussed how customers can respond to Microsoft licensing strategies.

Feeding the Microsoft Money Machine

Louis Pellegrino Blog

Louis Pellegrino, Director – 

If you’re a Microsoft Enterprise Agreement customer these days, you might be feeling like a walking ATM. It seems that the more products and licenses you purchase, the harder the sell becomes to buy even more.

The reality is that Microsoft Enterprise sale teams are assigned aggressive growth targets for increasing account spend year over year. And the bigger the account, the greater the pressure to grow revenue from that customer.

The problem is that the opportunity for organic growth simply isn’t there.  Many large customers – those with 5000 devices or licenses – are already well-stocked with core Microsoft products.  Ironically, however, it’s the customers with a lot of products – who would seem to have the least need for more – are the ones most aggressively targeted to drive additional revenue.

One common tactic employed by Microsoft sales teams is pushing new online services that customers either don’t need, aren’t ready for or already have from other providers.

Another ploy is to use a dizzying mix of licensing metrics, shifting pricing models and executive relationships to fragment and confuse the buyer and convince them they’re getting a great value-proposition – but only if they Act Now.

Customers who push back can expect to be played the compliance card and threatened with software audits or with significant price increases.

In addition to finding themselves under constant siege, many customers ultimately come to realize that they don’t have the time, resources or know-how to leverage any of what was sold to them as a great value proposition.

Bottom line: If you’re a large Microsoft customer, be aware that your wallet is at risk.

I’ll be hosting a webinar on Thursday, April 30th at 11 a.m. to discuss how customers can effectively respond to Microsoft compliance audits and sales strategies, specifically focusing on volume licensing agreements.

Weigh Pros and Cons before Deploying Microsoft Lync within Your Enterprise, Says Alsbridge

Even before ownership and decisions are made concerning support and operating structure, enterprises first need to weigh the pros and cons of a Microsoft Lync investment, says Alsbridge, Inc., a benchmarking, sourcing and transformation advisory firm. The firm’s latest report Pros and Cons of Microsoft Lync offers a guide to facilitate the decision to utilize Microsoft Lync as an enterprise telephony communication application.

According to the report by Alsbridge Inc., Microsoft has come a long way from the early days of Office Communication Server (OCS), improving their unified communication offering, capabilities and vision. The capabilities of Microsoft Lync, which includes instant messaging, presence, video, email and telephony, are highly robust offering strong value for enterprises, says report.

However, there are numerous technical challenges and complexities in deploying a Microsoft Lync solution.   If one cannot afford workarounds, delays, and higher than standard labor costs then one should consider other solutions or hybrids and not put all your eggs in a single basket with Microsoft.

Whether considering Microsoft Lync, or another unified communication solution, the enterprises must ensure:

1. There is an established and socialized solution roadmap

2. Connectivity and end point options are open and flexible

3. That you identified and vetted the total cost of ownership over the term of the agreement

4. That any solution solves or aligns with consumer communication trends and preferences

5. The solution factors in aspects of fixed mobile convergence, mobility, and BYOD.

6. The application is not tied to a specific proprietary or manufacturer solution

According to the report, executing planning up front, and answering critical technical questions before Unified Communication deployment; will allow enterprises to achieve the savings, customer support, and solution high availability.

For further details download the complete report Pros and Cons of Microsoft Lync.

About Alsbridge Inc.

Alsbridge is a global consulting firm that provides data-driven sourcing advisory and benchmarking services for IT, Finance and Sourcing executives.  We’ve helped hundreds of companies reduce costs and get more value from their vendors.  Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors.  Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients.  This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.