Spring Clean Your Software Licenses for Cost Savings

Loraine Lawson

It's nearly spring and that means it's time for spring cleaning - or, at least, that's what my mother tells me every year about this time.


Of course, we don't burn coal inside our house anymore, and bed bugs aren't the menace they once were, so it really doesn't have the urgency it did in the 1800s. But I think there's some value in applying the concept of a yearly cleaning ritual to modern life.


For instance: Why not spring clean your software licenses?

You might be able to save up to $100,000 a year by renegotiating your data integration licenses, according to this post published on Apatar's blog. Of course, Apatar is an open source data integration solution provider and has a vested interest in reminding you that you could save on licensing fees. But that number is actually from recent Gartner report, according to the post.

I wasn't able to locate the precise report-very possibly, it's only available to subscribers. Unfortunately, the blog post didn't provide a source for the statistic, but I do know that last spring, Gartner issued a list of cost-saving data integration tips, including a recommendation that you could save $250,000 by consolidating or replacing data integration tools and using lower-cost options instead.


It turns out, the devil is in the details with these licenses:


"Gartner insists that learning and understanding the terms of their data integration licenses is a must for wise companies. It also recommends to negotiate with multiple vendors which is essential to realizing maximum cost savings. Companies should keep negotiations open with multiple vendors until a contract with one of them is finalized - something too many companies fail to do. And, finally, companies must know their needs and and craft licenses to include only those tools and services that they will actually use. "


The economic downturn has only made these fine-print details even more significant. Sandy Kemsley, an independent systems architect, recently wrote about a webinar-coincidentally, also by Gartner-about cutting software costs. One of the topics they covered is the nuances of software language and how that can increase your costs. For instance, some companies write in license minimums or charge more if you upgrade to a larger server-even if you don't add any more users.


Maintenance fees are another tricky area for end-user companies, and deserve special attention during negotiations, according to Kemsley. You would think that if you're on an older, stable version of a product, you'd spend less on support and maintenance, particularly since the vendors are often saving even more money by offshoring that support now. But no. Those cost savings are not necessarily passed on to customers, at least, not without negotiation:


"Gartner suggests negotiating maintenance caps, the ability to reduce your maintenance if you use fewer licenses, and the right to switch to a cheaper maintenance offering. Document what you're entitled to as part of your maintenance, rather than relying on a link to the vendor's 'current maintenance offering,' to ensure that they can't decrease your benefits."


So, get out the magnifying glass, invite the corporate attorneys over for coffee, and check the fine print. You could find more than a few quarters hidden under the software license "couch cushions," if you dig deep enough.

Add Comment      Leave a comment on this blog post
Mar 17, 2009 7:24 AM bedbugger bedbugger  says:

Small correction: bed bugs have made a huge comeback since the late 1990s.  They're a big problem.

Mar 17, 2009 7:38 AM Loraine Lawson Loraine Lawson  says: in response to bedbugger

I know they've made a comeback,  but they're not as widespread...yet. I'm scared to death of the things.

Mar 18, 2009 1:01 AM data integration data integration  says:

Loraine, if you do come across the Gartner report mentioned here I'd love to see it.   I just looked myself and can't seem to find it.  Thanks!  - dan at jitterbit dot com.

Mar 18, 2009 12:14 PM Gurutd Gurutd  says:

There is a need to lower the cost of our licenses. They cost some money for individuals and even more for organizations. And with open source software as available as it is and as widespread, we need to look towards other solutions.

Just looking, for example, at OpenOffice compared to Word on my computer, let me tell you I changed last time I bought a new PC for home.

Mar 19, 2009 10:51 AM Michael Waclawiczek Michael Waclawiczek  says:

Interesting post and thread, but have to say that these savings, while sometimes large, are only working on the margins.

What I mean by that is the old, capacity-based pricing model for DI tools is no longer the only choice for companies today.  expressor software offers a usage-based pricing model that allows companies to buy only the software they need.

We price by channel-each representing a unit of processing-which ranges from $20k for a perpetual license to $5k for a six month term.

expressor customers have typically found they can get started on their first application for less than $50k and cut their total DI costs in half.


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