Tips on Negotiating IT Equipment and Software Contracts

    Any IT leader or decision maker can attest to the fact that entering into negotiations on tech equipment and software is a treacherous venture. Of course, the salespeople are out to make the most money for their companies. The negotiators are looking for the best prices on technologies their business needs to be competitive. The IT folks want the biggest, best and newest technologies that can be had. And overall, IT managers don’t want to get had.

    So how does one get into the mind of the vendor? Can you learn the best ways to negotiate so that your business gets the best deals on technologies?

    You can. Negotiation is a skill that anyone can master. Even managing IT vendor agreements can become a task that is less feared and more often a success.

    One IT professional blogged about how he manages to cut through the chaff to get to the heart of the matter. His lessons include:

    • Call the vendor when you need them; don’t rely on cold calls from salespeople.
    • Decide exactly what you need and then research your options.
    • Compare vendors and their options before you make a decision.
    • Gather all technical information and explanations before entering into price discussions.

    For an even more detailed discussion on common vendor traps and methods of sales, the book “Buying, Supporting, Maintaining Software and Equipment: An IT Manager’s Guide to Controlling the Product Lifecycle” provides extensive explanations on topics such as:

    • Product acquisition, support and maintenance
    • Hardware and software warranty models
    • Finance and accounting issues
    • Tech product details
    • Post-warranty support and maintenance issues
    • Negotiating with sales teams

    In our IT downloads area, you can read the second chapter, “Initial Support and Maintenance.” This chapter introduces the forms of hardware and software maintenance agreements as well as the pitfalls associated with paid maintenance contracts.

    Author Gay Gordon-Byrne tells what can and can’t be negotiated with such service agreements for both hardware and software products. Gordon-Byrne also explains basic contracts for printer and copier maintenance.

    In this chapter, Gordon-Byrne explains why software maintenance contracts cost more and are more difficult to negotiate:

    Diagnosing software problems is costly for any vendor, particularly when problems are not easily made to recur. The skills needed to diagnose problems and write corrections are in high demand worldwide. The software vendor does not want to be patching code, particularly code that does not generate revenue. Software maintenance is often more costly to provide than hardware maintenance because the solutions to problems have a highly trained labor component.

    IT managers and technology decision makers should read up on negotiating contracts with vendors before entering into any meetings or presentations from salespeople. Once they find out how the games are played and what methods vendors use to convince them to spend more, they can better bring the contract in on their own terms and save money for the entire company.

    Kim Mays has been editing and writing about IT since 1999. She currently tackles the topics of small to midsize business technology and introducing new tools for IT. Follow Kim on Twitter @blumoonky.

    Latest Articles