Software asset management doesn’t exist in a vacuum, and software asset managers (especially if they are a part of a larger company) will spend a large chunk of their time appealing to stakeholders. In fact, some IT departments even hire stakeholder managers just for that specific task.
With so much riding on convincing this group of people that your SAM solution is a good one, what is the best way to foster a strong stakeholder relationship?
Over the years, the MetrixData 360 team has helped many companies work through their own SAM solutions and have helped manage dozens of stakeholders in the process of each engagement. so today we thought we’d share what we know about working with stakeholders, especially when they don’t know anything about SAM.
Who Are the Stakeholders?
Your group of stakeholders is composed of anyone affected in any way by your SAM project. The bigger your organization, the more stakeholders you’ll have whose job will be to either support or hinder it, depending on how they perceive your project will impact them (either negatively or positively). Some stakeholders that you might have to deal with in your attempts to implement an effective software asset management strategy in your company includes but are not limited to:
Senior executives that would oversee the SAM program
CIOs and their IT VPs
CFOs and their Finance and Procurement VPs
The Business Unit Manager
The Chief Compliance Officer
Having these stakeholders in your corner means that you’ll have someone who is willing to back your SAM project, defend it, and (most importantly) fund it and give you the go-ahead to begin.
Principles of Stakeholder Management for Software Asset Management
For instance, if you’re speaking to the IT Operations VP, focus on how SAM will create labor saving potential and operational efficiency. If you’re speaking to the CFO on the other hand, focus instead on cost reductions and budgeting potential.
Clarify what you want from each of your stakeholders. Your case should accurately lay out the anticipated size and complexity of your SAM project, the amount of help and resources you’ll require and how long your project is estimated to take.
Try to put in as much detail as possible but make sure to account for the fact that SAM projects are subject to roadblocks in the form of missing data or discovered compliance issues.
Educate Your Stakeholders
It’s important to ask yourself how much each stakeholder might know about software asset management. Someone with a background in finances might not have a history working with or understanding the complexity of SAM.
If you feel like you might be greeted by a boardroom of blank faces with your business case, it might be worth it to include a quick overview of what SAM is and the general value it can provide to a company.
After you’ve gotten your initial shot to try out your plan, you’ll have to prove that it was worth their trust by providing progress reports frequently. These reports should detail if you’ve hit any milestones in the project plan, if you’re seeing any return on investment etc.
It’s especially important that you communicate your progress during the early stages of the project, where confidence in your SAM vision will be the shakiest and the project is most prone to change. At this point it may be beneficial to aim for easy wins and low-hanging fruit to display results quickly.
Once momentum is gained and the value of your project is proven, then the cost of pulling the plug will be higher and you can breathe a bit easier. These reports should also include any difficulties you are facing that present the potential of slowing down the results of your project.
You’ll need to provide separate reports for each of the stakeholders, tailored to their specific interests (don’t make the VP of Procurement slosh through data on how many hours of labor you’ve removed from the IT staff) and their certain level of supervision; will they be closely managing your project? Or will they simply need to be kept informed? These reports will be vital in securing permission to advance your project into its next phase.
For this reason, stakeholder management needs to be treated as a critical aspect of your project and not given the half-hearted attention of a side task. The last thing you want to do is have your stakeholders feel like you are treating them like a low priority.
For reporting your progress, your SAM tool can easily prove an excellent resource, since they will be able to provide excellent reports and insights that each of your stakeholders will find useful.
Develop a Strong Relationship with Your Stakeholders
Without appealing to the right stakeholders, your vision for properly implementing a strong SAM solution will never get off the ground. It’s not because it isn’t a good idea, SAM is an excellent way to curb expenses, manage risk and empower companies to manage their own software licenses. And it’s important to remember that is what you’ll be able to bring to the table.
At MetrixData 360, we have helped many companies realize their goals when it comes to software asset management, we’ve removed a lot of stress and headache from our clients by taking care of the majority of the difficult work, so you can deliver great results with minimal effort on your part.
If you’d like to learn more about our SAM-as-a-Service offering you can check out our service page!
Getting Ready for a Software Audit with SAP? Five tips to keep in mind
Of all the software publishers out there, SAP is known for dealing out particularly vicious audits with high numbers that are dreaded by SAP customers.
But living in constant fear of being audited is no way to live your life.
If you have SAP software of any substantial scale, then it is only a matter of time before your SAP audit is at your door. The best thing you can do is simply prepare.
At MetrixData 360, we have gone up against SAP in enough audits to know what to expect.
In this article, we’ll share with you the five ways you can prepare for an SAP-specific audit.
Know What Triggers an SAP Audit
Expect an SAP audit at least every two years. You may receive a software audit from SAP more frequently if:
you are a larger corporation
your company has gone through a merger or acquisition which has led to substantial growth
you have purchased a new SAP product
you are deemed a ‘high risk’ customer based on the findings of a previous audit
Basically, if your last audit didn’t go so well, then in SAP’s mind, two years is a long enough time for old habits to flare back up and for disorganization to creep back in.
While it is not a rule set in stone, SAP may initiate audits as a reactive measure to events that are occurring within their company. If SAP has lost a competitive bid, if their sales are slowing down, if they have released a new licensing model, it may increase the likelihood of you seeing an audit sooner rather than later.
Know Your SAP Software Contract
SAP contacts have the tendency to be needlessly complex, with over 100 separate Agreements/Order Forms/Exhibits/and so forth. These contracts all contain custom wording that can be difficult to understand but this comprehension of your agreements is critical if you want to avoid the brunt of an audit. Take something so simple as SAP’s definition for Use, as an example.
Isn’t it great when a software publisher slightly changes the use of a seemingly commonly understood word? For SAP that word is “use.”
According to SAP’s Software License Agreement, Use is defined as the ability to load, execute, access, employ the software or display the information resulting from those capabilities. This is a fancy way of saying basically any interaction or capability of interaction with SAP’s software can be defined as Use and any Use requires a license.
Since the definition is so broad, it means that it could prove a challenge in an upcoming audit for companies who do not have a strong understanding of Use according to SAP.
In particular, you should make sure that your company has a strong understanding of the following terms as laid out in your specific agreement since they are often subject to customization:
Named User
Definition of your particular license metric, with close attention to any exceptions that your company could qualify for.
Indirect Access or wording related to Indirect Access such as External user, interfaces, etc. Pay attention to even the smallest clause.
SAP Indirect Access
Many SAP systems have a dual-licensing system that relies on two main components.
Packaged licensing: is what you paid for and what you use. I couldn’t tell you which metric SAP will use since SAP uses every metric under the sun and it will vary from product to product.
Named User License: allows a user to use any number of SAP applications that can be found in the packaged licenses. Every user needs at least one license and to access any package you need a packaged license and a named user license. Confused yet?
Taking the SAP definition of Use as seen in the last section, Indirect Use can be interpreted as Use through a custom-built application or a third-party application. So basically, anyone who touches SAP data or software in any way could be considered having Indirect Access.
Make sure that you have a clear map of your SAP environment, including any SAP architecture not linked to your main ERP environment and affiliate system that might be interlinking with your SAP environment.
Risk Management for SAP
Before you start organizing your briefcase full of money to hand over to SAP for the purchasing of more licensing, there are a few strategies you can implement that can address the compliance issues of an SAP audit even before you are found in the middle of one. License purchasing should only be used after all other methods have been exhausted.
License Identification: You may already have the licenses required to cover unique and seemingly unlicensed scenarios. You need to figure out if you are even in trouble before you start paying for it.
Software Reconfiguration:With issues like indirect access, a reconfiguration of your software architecture may be just the thing you need to get you out of the compliance risk hotseat.
System Clean-up: It’s important that you are using up-to-date software, and a system cleanup can be a great way to reduce your exposure.
Have the Right People on Your Side
Above all else, it’s important that you have the right team to handle an SAP audit. This isn’t a side project your IT department can get done in their spare time.
An in-house software asset management team, while they may be more integrated into the culture of your company, will need to be versed in licensing and contracts from every vendor in your profile, negotiation skills, expertise in technology and so many more.
To get all the resources you need, you will be required to hire a whole team of experts and it may take them a while to get up to speed. An external expert may come at a higher starting price but their immediate expertise and scalability to match your project can make it easy to gain massive returns on your investment.
If you’d like more information about the pros and cons of hiring a SAM expert vs. doing it yourself, check out our article!
End on a Good Note!
The frequency of software audits are only accelerating, and SAP is no exception. Ignoring what you have in your software licensing environment until your SAP audit is upon you will only create further problems, along with copious amounts of unneeded stress for you and your company. Imagine being able to approach a software audit with confidence in your own compliance and a rock solid defense to back your claims?
At MetrixData 360, we have all the tools you need to get yourself ready for any audit that might be thrown your way, regardless of which software vendor it comes from. So, get ahead of your audits today!
If you’ve just begun to dip your toes into software asset management, you may have realized just how consuming of a job it can be. But implementing Proactive SAM measures can help to slow the chaos down and avoid it all together in the future. Perhaps your software environment was disorganized when you started and now after weeks of struggling, data hunting, and persevering, you’ve reached a state that SAM experts like to call Reactive SAM. At this stage, you have full visibility into your software architecture. And that really is great news! However, despite how tempting it may be to throw in your SAM towel and call your efforts good enough, there is a reason why, once you’ve reached this stage, it may be beneficial to keep going. What’s the next step after this? And why would you even bother to continue after you’ve made it this far already? At MetrixData 360, we have seen many companies who have made it to this stage only to have their motivation and interest dip, and so in this article, we’d like to show you the benefits of pushing forward in reaching your software asset management goals.
The Problem with Reactive SAM
When many companies first begin to implement SAM throughout their company, they may be tempted to assume that their job is done after they are finished running or installing their SAM tool, but it isn’t so simple. There are five stages to SAM maturity, of which the Reactive Stage is only the second:
Chaos:
Nothing is monitored, there are no SAM processes in place and no SAM tool installed. Unplanned costs due to unbudgeted audits and rampant cloud spending is the norm.
Reactive:
At this stage you have a SAM tool and a static view of your software and hardware inventory. Now you can start creating purchasing processes and root out compliance issues.
Compliance Plus:
At this stage you’ve reached compliance and now you have greatly reduced your audit risk. At this stage, you’ve also reached proactive SAM. Your next goal will be to automate the SAM process to ensure continual compliance.
Optimized:
Now it’s time to start realizing some tangible savings and negotiation authority. At this point you’ll be able to discover cost saving opportunities and scenarios.
Amplified Value:
At this stage SAM isn’t just an idea but an integrated part of your company’s culture. Now SAM has a hand in procurement, data center architecture, portfolio management and vendor management. From here you can now project saving scenarios for the future.
As you can see, while reaching Reactive SAM is an achievement, it is only the first milestone that will allow your company to reach meaningful savings. While many companies chose to halt their SAM process after reaching the Reactive stage, there are limitations in what you can do from this decision:
Your organization will be stuck putting out fires: As the name would suggest, in Reactive SAM, you and your team will spend a lot of time reacting to problems as they arise and you won’t be in a position to effectively alter the root cause of the problem, so the issues are bound to keep happening.
Audits will still catch you off guard: unexpected audits can be quite the slap in the face to your business and at this stage you will be stuck exhausting your resources to address the issues of an audit.
You still won’t be able to regulate spending or consumption: Without coordinating the efforts of your procurement and IT departments and without a complete understanding of your software estate, you won’t be able to set a budget that your company can stick to.
What Does it Mean to Have a Proactive SAM Strategy?
Reduced Risk: this is the biggest appeal for most companies. When you employ a proactive SAM strategy you are lowering your risks for software audits, compliance issues and unbudgeted software cost.
Cyber Security: cyber criminals will often use old, untracked, and unnoticed software as an entry point into your infrastructure; greater visibility will increase your ability to keep software updated and protected. If you’d like to learn more about how software asset management can help improve your cyber security, you can check out our article: How SAM Can Improve Your Cyber Security
Savings and Peace of Mind: Knowing what you have and knowing it is properly licensed will allow you to rest easy at night without having to always be looking over your shoulder, wondering when the next audit-shaped wrecking ball will come swinging towards your company. You will also be able to realize more meaningful savings when you build a proactive SAM portfolio as you take control of your software environment.
Anyone who will have an influence on your SAM project should be considered a stakeholder, this includes people who are in charge of purchasing your company’s software licenses and people who manage that software. It may be difficult to balance the relationship between these two parties, since the financial side will tend to be motivated by a tight budget and may see SAM as a frivolous luxury. Meanwhile, the tech side of things might see SAM as something of a deterrent to the effectiveness of their software infrastructure. It may be a challenge to convince both parties to get on board with SAM, and for that reason, we’ve made a few assets to help you along the way:
SAM is not a part-time job, if you want to make it to the Proactive stages, you’ll need someone to own the project. While the needs of every software environment are unique, when searching for your new SAM team you’ll need to take into consideration the number of vendors and the complexity of your software environment. There are a few options to pick from when it comes to hiring a SAM team, you can hire internal resources or outsource the project to a third-party. If you’d like to learn more about the Pros and Cons of each solution,you can check out our article here!
Anticipate Roadblocks
Fortune favors the prepared, as the saying goes, and sadly not everyone in your company is bound to understand the inherent value of software asset management right from the get go. Expect and prepare for such obstacles like:
Given a small budget for SAM
Solution: Start small and find low hanging fruits that can create small savings and quick wins. These small victories will act as proof to encourage upper management to further invest in SAM.
No internal resources and no one with licensing experience
Solution: There’s no need for you to do this all alone, which is why you need to make it a priority for you to get the help you need.
Keep Calm and Carry on With Your SAM Journey!
Now that you’ve started on your SAM journey it’s important that you keep on pushing to get more meaningful results. Reaching a stage of SAM Reactive is great but it is not the most stable position and the last thing you want is to let your software environment fall back into a state of chaos and risk. At MetrixData 360 we have helped companies at every stage of SAM maturity and have helped them reach their own goals quickly and efficiently. If you’d like to learn more about our Software Asset Management as a Service offering, check out our SAM Service Page.
This is not a tiny sum considering many companies put millions of dollars into their software budget every year. But what is the root cause of this problem? And how can you proactively strive to avoid such a costly predicament?
At MetrixData 360, we’ve helped our clients save millions of dollars on their software licensing just by simply cutting away the excess they didn’t need. After reviewing so many of our client’s profiles, we’ve noticed a few commonalities. So, let’s take a look at what causes this bloom of unused licenses and how you stop its spread.
What Is Shelfware and Why Should You Be Worried?
Shelfware is a rather informal term in the tech industry that describes software or hardware that you have purchased but are not using. There are many reasons why this shelfware might manifest in your company:
The product does not have a complete life cycle and has not been retired or re-harvested correctly. Even though no one is using the hardware or software anymore, it is still considered active.
The product has been purchased in a bundle, a discount offer, a testing scenario, or simply as an impulse buy. Perhaps the company envisioned it being used for something or perhaps they thought they’d find a use for it later. Now however, it exists as excess beyond what the company initially needed and they continue paying for it.
Despite investing time and energy into planning, testing, deploying and developing a product within their software infrastructure, the stakeholders of the company just aren’t interested, and the software is shelved for the time being, if not indefinitely.
When your company houses significant amounts of shelfware, you run the following risks:
Security Risks: losing track of assets may leave them outdated and under-patched, and therefore exposed to potential security breaches. Few hackers will try to butt heads directly with your firewall; most attacks occur through old and forgotten software.
Financial Risk: the biggest risk of shelfware is a financial one: despite the software not being used, you are still stuck paying software fees in addition to continued maintenance.
Common Causes for Shelfware
Upfront Payments
This is a common tactic that the software vendors use — they often offer a greater discount with larger upfront purchases in order to obtain those enterprise-level deals.
This makes sense when you consider their motivations. Their goal is to ensure you are perpetually increasing your spending with them and to make their year-end quotas, so it will not make much of a difference to them if you end up making effective use of the software.
On your side of the table, you are optimistic that you’ll be able to use the extra licenses for something, if not now, later. Besides, it will be worth it regardless because you will have a better discount, right?
However, the result is a massive and growing stockpile of shelfware. It’s important that your discount is not your only goal during a contract negotiation. Instead, focus more on your company’s future growth and the exact amount of licenses you will need.
Related: For information on how to conduct a software contract negotiation effectively, you can check out our article: Guide to Software Contract Negotiations
Compliance Satisfaction
Software audits are known to get messy. What usually happens is that the software vendors will send in their auditors. The auditors, who may very well have been paid based on the size of compliance gaps they can find, review your software environment and produce an inaccurately large compliance gap based on making conservative assumptions.
Since they assume the worst-case scenario and if you didn’t have a strong defense to counter them, then you likely had to settle the negotiation phase. This will be done by buying the number of software licenses you were told you owed, which turned out to be far from reality.
Since your compliance gap is overinflated, you have to overbuy on licenses just to satisfy the vendor and to bring the tedious audit to an end. This leaves you with far more licenses than you actually have a use for.
Having a strong software audit defense will give you the tools you need to prevent this fate. Imagine only paying for what you owe during an audit. It’s possible, and if you’d like to figure out how you can get started on building out your rock-solid audit defense, you can check out our software audit defense page.
Licensing Metric
Every company is slightly different in the way their software environment is run and how it can most effectively be licensed. Certain licensing metrics, therefore, can prove more expensive for certain companies than others.
For instance, let’s say you are licensing a product using a per-user metric.The system that will be hosting the product is accessed by nearly everyone in your organization, despite the fact that only 20% of your employees will need to use the product.
In order to be completely compliant, you will need to find a solid way to prove that only certain employees are using the product without having to buy a license for everyone. It all depends on how your unique software environment is configured and it is important to take into consideration the multiple licensing metrics that your vendor offers.
Losing Track of Assets
One of the root causes of shelfware is not having a clear picture of what you have and what you need.
Many companies purchase based on what they have purchased in the past or based on an educated guess (we have 1,000 employees, therefore let’s get 1,000 licenses, done!). This type of oversimplified estimation puts you at risk of guessing too high or too low, both of which can prove costly and unnecessary.
Having a clear picture of your software environment will help to prevent shelfware through reharvesting old licenses and avoiding the purchase of unneeded new licenses. This is an area where Software Asset Management (SAM) can prove highly advantageous since SAM will give you a clear picture of everything you have in your software environment and based off of that, everything you need to purchase.
You can also use SAM to create a value gap. An organization is made up of all kinds of employees, and each employee needs a different type of technology in order to get their work done. Some employees sit behind a desk all day, working on five monitors with the best technology at their fingertips while other employees spend their days on their feet sharing a desktop with five other employees.
Licensing all of an organization’s employees the same way will mean that the employees on their feet will get the same technology as the high consuming employee with five monitors, despite the fact that they will use it significantly less.
Hand-tailoring your licenses to match the specific needs of each employee type will greatly reduce your end cost, but the type of data you need to create this type of solution is only provided by software asset management tools.
Ask users their opinions on the technology and assess how useful it will be to their job. This will give yourself a clear framework on how the investment will better improve the productivity of employees.
Make sure that you provide effective training that teaches employees how to work with new software so that you can ensure the proper integration of the software into your organization.
Get the Software You Need and Skip Paying for the Extras
Shelfware is a common occurrence that organizations suffer from. It is an unnecessary and unseen leech on their budget. There is, however, another way of doing things, which will allow companies to effectively control their software spend without running the risk of software compliance. This involves creating an effective software asset management strategy.
At MetrixData 360, we have helped many of our clients create a rock-solid SAM strategy using our combined tools and team of experts, giving them peace of mind while they move forward in developing their organization’s technology.
Are you shopping for a new place to store your data on the Cloud or are you moving there for the first time? It may be easy to assume that your only options are AWS, Azure, and Google. But while it’s true these giants claim a huge chunk of the marketplace, they are not the only options you have. We’ve put together a who’s who of the top cloud providers outside the Big 3.
Whatever brings you into the Cloud market, there’s something here for everyone. It’s important you pick a provider that gives you a solid solution that is right for you.
At MetrixData 360, we’re in the business of making sure your Cloud migration is smooth and painless with as few unneeded expenses as possible from a software licensing perspective. So, in this article we’ll go over a few of the hottest cloud providers of 2020 who act as suitable alternatives to the big three and see which one is right for you.
Why Go for a Small Cloud Provider?
Bigger is always better right? Not necessarily. Smaller cloud providers have an advantage over the larger cloud providers when it comes to the following areas:
Customer Relations:
If you’ve ever had a customer service issue to bring up with the large companies, then you’ll know how long they tend to keep you waiting and how little time they have to deal with individual problems. With smaller providers you get to be treated less like a number and more like a person.
Specialization:
While companies like AWS have their hand in almost everything, smaller companies are allowed to have a more narrowed focus and create the most effective strategy for their unique solution.
Tailored Services:
Larger companies tend to have a generic, one-size fits all price. However, since smaller providers usually have to do more to survive, they will often make tailored solutions based on your specific needs, budget, and requirements.
Innovative Solutions:
Smaller companies need something that makes them stand out and this often leads to innovative products and services.
Top Small Cloud Platforms of 2021
Since Google Cloud, Microsoft Azure, and Amazon Web Services make up more than 50% of the cloud platform marketshare, it’s only natural that they would show up in anyone’s search for a cloud platform. But that market saturation tends to wash out smaller players who can often provide just as much or more value as the big 3, and sometimes at a better rate.
Oracle Cloud
Perhaps a little bit of a late bloomer when compared to its competition like Amazon and Azure, Oracle has still proven to be a reliable product and shows steady growth.
Although Oracle does have a hand in both the PaaS and the IaaS industries, Oracle is primarily a software provider, covering companies that range from small start-ups to enterprises. For this reason, SaaS will be Oracle’s trump card, along with their autonomous database services. Oracle also offers hybrid solutions for their cloud customers.
Pros
Computing capabilities
Adjustable storage settings
Large storage services for low cost
Cons
Limited integration with other software
Limited tutorials
No keyboard shortcuts
Cisco
Cisco has become a collection of multi-cloud products and applications, creating for its customers complete freedom when it comes to workload placement, with its main appeal being Application Centric Infrastructure (ACI). It has partnerships with Azure and AWS, with expected expansion into Google Cloud, proving ideal for multi-cloud deployments and hybrid solutions.
Pros
Highly secure, open and flexible solution
Allows you to connect to a large ecosystem of cloud providers
Kamatera is known for its low prices in Cloud services and high-performance infrastructure offering reliable performance and unhindered availability, making it suitable for businesses of all sizes.
Kamatera also tempts its customers with tailor-made VPS hosting and offering you full access to their Management Platform features.
In 2018, FinancesOnline awarded Kamatera the Great User Experience and Rising Star awards. Part of what won them those awards are their around the clock, 7 days a week, all year-round tech support (and you’ll talk to an actual human, how exciting!). Their data centers stretch across four continents to provide global support and the promise of 99.95% uptime guaranteed.
Pros
100% free 30-day trial with no hidden fees or commitments
Limitless scalability and storage
Simplified and user-friendly cloud server management
Able to add server when required
Add the database of your choice
Cons
A few of their customers have noted slower response times
Rackspace
Offering their expertise in several different cloud services, such as dedicated hosting, AWS, Microsoft, and OpenStack, Rackspace has an excellent reputation for innovation and was named the leading hosting provider in Internet Retail for three years in a row.
Both virtual servers and dedicated physical server available
Cons
Little to offer in the way of shared hosting plan
While you will always find someone on staff to answer your phone calls, poor customer reviews often complain that employees are undertrained
Alibaba Cloud
Alibaba has really taken off in the Asian markets, acting as the single largest enterprise-only Cloud provider. The Chinese company has a wide array of high-performing services very similar to AWS, including data storage, relational databases, big data processing, content delivery networks, just to name a few.
Pros
Servers are configured so that websites are totally isolated from one another (one website going down won’t take out the whole server)
Great range of products for enterprises
Very detailed in their documentation
Cons
The regular hosting plan might seem limited (5GB of disk space, 1GM MySQL 5.6 database and 1,000 concurrent connections)
Despite its global network, Alibaba’s data centers are only located in the US and Hong Kong
Complicated interface and installers
VMware Cloud Horizon
While perhaps still smaller than the giants of the industry, VMware Cloud Horizon still remains a heavy hitter, with a global network and services that are paired with reasonable prices.
The main benefits of VMware Cloud Horizon is its security, its unified management, its maximum flexibility and its high availability promising 99.99% uptime with confidence.
Device agnostic, suitable for Windows, Macs, Androids etc.
Cons
Designing architecture can be a confusing task
Flash management console can be sluggish
There are no migration paths, which requires you to start from zero
SAP
SAP Cloud Platform has gained a small but loyal fanbase of businesses of all sizes. Its main appeal comes from its high scalability, its top-quality support, and its valuable features like data synchronization and negotiable pricing.
The first step in picking a good partner is asking what kind of services they provide. Many people move to the Cloud for a variety of different reasons: to save money, remove the hassle of managing software architecture on-prem, or to increase your economies of scale.
To know what kind of answer you’re looking for, you’ll need to know what your cloud computing needs are. This will dictate the type of services you’ll require.
Security
You’ll want to know how secure this provider is and their capabilities of storing and protecting your data. Make sure they have standard security measures in place and are constantly striving to improve.
Do they have firewalls and anti-virus detection?
What about data encryption and security audits?
Make sure you are completely comfortable in handing over your data.
It’s also a good idea to make sure your Provider adheres to the legislation specific to your industry regarding data management, privacy, and security.
Data Centers
You will want to know where your provider’s data centers are located and if those data centers are compatible with where your company will be working. You will also want to know how safe these data centers are.
Are they protected from natural disasters, theft, and other events that could result in the loss of your data?
What will happen if your provider loses your data?
Will you be compensated for the loss?
What kind of downtime history do these data centers have, and whether you will be unable to access your data for an extended period?
As the function of your business becomes dependent on your ability to access the internet, ideally this number should be zero. You should also ask what Disaster Recovery solutions they have in place regarding data redundancies.
As your business grows, it is important to make sure that your cloud provider can compensate for your growth.
What is their storage capacity and what sort of additional services will you need as your business grows to new heights?
And will this provider be able to meet those new demands as they arise?
When it comes to the Cloud, there might be several overwhelming options to pick from, especially when confronted with choosing a provider. Switching providers can be a nightmare, so it’s always best to get it right the first time.
At Metrixdata 360, we have helped many clients successfully migrate to the Cloud with as little expense as possible; we make sure that everything is organized in regard to your licensing so that when you move to the Cloud, you won’t take your compliance issues with you.
A software audit is typically considered to be an overwhelming and confusing experience, complete with a mountain of work you need to do in an unreasonably short amount of time. It provides you with stress and a sense of overwhelming helplessness that you’d just rather not deal with. Having an internal software audit checklist will make sure that you will have everything in order when the inevitable happens.
At MetrixData 360, we’ve been through so many software audits and have been able to help our clients succeed in seemingly hopeless situations. How? Kept a cool head, remained calm, and had a clear list of things to do at every stage of the software audit. Even if you aren’t in an audit yet, it is always better to be prepared because there’s a good chance you’ll be in one soon.
A Typical Software Audit is Broken Down into Five Stages:
So we’ve taken a look at each stage and have compiled a software audit checklist of the most important things you’ll need to do.
Phase One: Notification
Upon receiving a notification that you have been selected for a software audit, you will need to do these first steps immediately.
Determine If You Must Respond
While you are legally obligated to participate in a software audit, not everything that is dressed up to look like a software audit is one. Reviews are similar to software audits in that they go through the same process.
However, reviews (or whatever flowery, less aggressive name your particular software vendor gives them) are not audits. They are voluntary, they often result in lighter fines, and they can be conducted internally.
Therefore, determine if you have to respond and plan accordingly.
At MetrixData 360, we advise that you respond to reviews and treat them with the same severity of a software audit since refusing a review often results in the same vendor sending you an audit, which you can’t refuse. It will set the process off to a rocky start, with your software vendor knowing you were dragged to the software audit kicking and screaming.
Before any data is handed over to the auditors, you need to set up a three-way non-disclosure agreement between the third-party auditor, the software vendor, and your company. This will keep the third-party auditors from disclosing any data with the software vendor without your approval. While many companies have their own NDAs, you should be wary if the software vendor provides you with an NDA to sign, since it will usually have language that will offer you minimal protection. For just one example, a contract may have language that allows scripts to be run in your software environment but does not hold the software vendor legally responsible for any impacts that might have on your production environment.
Ensure that the Scope is Clearly Defined
In order to avoid scope creep, make sure that the scope of the audit is clear regarding the regions that will be included and if the vendor has several products, which products will be examined.
Begin Creating Your Own ELP
Immediately start to create your Estimated Licensing Position (ELP) by gathering data on the relevant products; this will give you a strong case to oppose the auditor’s findings, which will most likely have an over-inflated compliance gap. Your Estimated License Position should effectively compare your deployment data with your purchased licenses regarding the scope of the audit.
Designate a Single Point of Contact (SPC)
It is important to immediately establish who is responsible for corresponding with the auditors throughout the process. Having a single point of contact controlling the flow of information to the auditors will give you a clear picture on what the auditors know and where you stand with them. The SPC should be someone who has a strong understanding of negotiations, software licensing, deployment data and software contracts.
Phase Two: Kick Off Meeting
Scheduled to mark the beginning of the software audit, the kick-off meeting will be composed of (either in-person or online) the software vendor, their auditors, and any other stakeholders who will be involved in the process. The Statement of Work or its equivalent will be presented and topics including timeline and scope will be discussed.
Pay Close Attention to the Timeline
The auditors will want the process done as quickly as possible to ensure return on investment, but you need to push back against unreasonable turnaround times and fight for a timeline that works for you.
Unless you negotiate for more time, you could easily be left with having only fifteen days to slosh through thousands of rows of data.
Negotiate a timeline that works with your schedule because you shouldn’t have to sacrifice your time off, your busy season and your sleep just to meet an unrealistic and arbitrary deadline. Not to mention a rushed-out response will likely not provide you the solid defense you need.
Prepare a Defense for the Accuracy of Your SAM Tools
The auditors will most likely say that your SAM tools fail to collect all the data that they need in order to complete the audit. They will then demand to exclusively use their own. This will be the case even if you have an inventory tool that the auditing software vendor has approved.
However, it is in your best interest that your own tools are used. You should push for a position that allows the auditors to either supplement any missing data from your inventory tools with their own or extract data samples from your SAM tool to test its accuracy.
Clarify the Data Requirements
The auditors may be intentionally vague about a few things, including the metrics that will be used to count your deployment data; your licenses, your user counts, or your authorized users, etc.
You’ll need to make a point of clarifying what the auditors have left unclear to make sure you understand what exactly they will be asking for and why they need to see that data. Not everything they ask for will be relevant to the audit.
Phase Three: Data Collection
After the kick-off meeting has concluded, the data collection phase will begin. Often seen as the most time-consuming and costly part of an audit, the data collection phase will involve the auditors asking you and your staff to run scripts and pull data.
They will most likely not come on-site (think of the travel expenses they’d rack up if you had international locations!), but the auditors may visit to verify certain data points. They may interview staff, or they may observe your staff running specific scenarios.
Verify that Any Employees Who will be Interviewed are Prepared
Make sure everyone who will be interviewed by the auditors is aligned on what will and won’t be said. While you should never strive to hide things from the auditor, you should have a clear understanding of what your stance is with the vendor. You will also need to ensure that employees give answers that are complete and accurate.
Review all Data Requests
Your Single Contact Point (SCP) needs to be reviewing all data requests sent from the auditor to make sure the requests are reasonable and within the scope of the audit. Keep asking questions and make sure you always understand why the auditors are asking for something and understand the impact each piece of data will have on your overall stance with the vendor.
The SCP should also review each piece of data that is sent to the vendor so that you fully understand your stance with the vendor.
Your SCP Should Be Your Only Contact with the Vendor
All communication with the vendor must be done exclusively through your SCP. Again, this is not done to keep things from the vendor, this will simply make it easier to keep effective tabs on your position with the vendor during the process. You need to know what the vendor knows to effectively frame your argument during the negotiations.
Review Data Quality
Make sure that all the data you give to the auditors are of good quality and do not conflict with each other. You also need to check that the data released is not providing any unnecessary data that can be used to make assumptions against you.
Phase Four: ELP Creation
After the data has been gathered, the auditors will present you with their Estimated License Position (ELP) of your software environment, which will consist of your deployment data, compared against your licenses to create a compliance gap. They will ask you to review their findings before they send it over to the software vendor to correct them on any errors.
The ELP will be composed of thousands of rows of data and will be tremendously difficult to read through in the amount of time the auditors will give you.
Compare the Auditor’s ELP with Your Own
Being able to cross compare the auditor’s findings with your own will allow you to effectively challenge auditor’s conclusions. Common tactics for challenging the auditor’s findings include:
Investigate any area of the auditor’s case that you know, suspect, or even feel to be inaccurate.
Look into which team provided the data that the auditors used in their inaccurate assumptions and ask for validation.
Seek clarification on unclear items and have the auditors explain what they’re planning on telling your vendor.
Highlight any disagreements that you have on the auditor’s findings, submit explanations for any grey areas or propose plans to fix any shortcomings.
Negotiate the Timeframe
After the data has been sent off and the fact-finding portion of the audit is closed, the vendor will begin setting up a timeframe for purchasing any license shortfalls. It is important to realize this is not a settlement but a negotiation at this point, so push for a timeframe that works for your company’s goals and interests, not the vendor’s fiscal goals.
Phase Five: Negotiation and Settlement
Going off of the compliance gaps the software auditors have found, the vendor will sit down with you to hash out a negotiation for how you will make up for any shortfalls.
This is often where companies feel disheartened, tired, and cornered. They just want the issue to go away and feel as if the compliance gaps the auditors have found is set in stone.
It’s important to remember the data is up for interpretation and you have more wiggle room than you might think. It’s important to stay positive during this stage, with the help of MetrixData 360, our clients were able to greatly reduce their compliance gaps and the amount they had to pay out.
Consider the Multiple Stakeholders
There are many people involved in the audit from the vendor’s side that are reporting to managers with different agendas from one another. Stakeholders involved in the audit include:
The License Compliance Team
The Technical Resource Team
The licensing or contract group, who may not be licensing experts, but are certainly responsible for selling licenses
The Sales Team, which will include your account manager
The vendor’s legal team, including the lawyers
All of these different teams might be compensated in different ways: one team might be paid based on the revenue they manage to obtain, while another on whether this audit is conducted according to legal standards or on how satisfied you are with their work.
When the vendor’s representative says they need to obtain internal approval, these are the people they are consulting. You need to word your requests in a manner that appeals to all stakeholders involved.
Stay Calm
Take comfort in the fact that you have done everything you possibly can to prepare for this software audit. Do not be pressured into timelines. Do not be forced into a settlement that is not accurate because you were not given enough time.
Be Prepared
Be ready to research the licensing terms and other claims the vendor makes.
Leverage
Be willing to leverage senior executives within your company and the vendor’s. A well-timed call to the right person can be very effective to unblock a stalemate in the process.
Stay Focused
Your goal is to purchase only what you need. Often software audits are used as a sales tactic.
Just when you feel cornered in the software negotiations, you can expect to be pushed towards purchasing new products. You must stay focused and strategic with your software purchases regardless of the pressure the software audit puts you under.
Coming to the Meeting with the Right Persona can Make all the Difference! Learn the type of personality it takes to Win Contract Negotiations in our article: 5 Key Traits to Winning Contract Negotiations.
The Four Factors
During the negotiation process it is important to remember that it is a balancing act between four key factors.
Future Revenue vs. Immediate Revenue
The software vendor will try to lean more towards immediate revenue while you should try to put most of your argument towards future revenue.
Time of Payment vs. the Relationship Between the Vendor and You as a Client
The vendor will try to push for getting their payment quickly and it would be helpful if you pushed from the angle of keeping the health of your relationship with that vendor intact.
The Closing Statement
Make sure you get a closing statement after final figures have been decided at the end of the negotiation. Some vendors may indemnify you from future audits by looking back past the date the audit closed. A closing statement will give you the freedom of not having to worry about another audit from that vendor for a minimum timeframe or else they will be at liberty to audit you using findings that date back prior to the close of the audit.
Have a Strong Defensive Strategy for your Next Software Audit!
Software audits can be exhausting and probably far outside the scope of what you were thinking your job would look like. However, it is possible to get through just fine by following the software audit checklist, remaining calm, staying focused, and having the right people on your side. Question everything the software vendor asks for, and don’t be afraid to push back when you don’t agree with certain findings. Let’s not dance around the issue, the vendors are here for your money whether it is owed to them or not and you need to know how to defend yourself.
MetrixData 360 not only takes care of all the heavy lifting during a software audit, but we’ll teach you what we’re doing so that you’ll be prepared the next time around. If you’d like to learn more about our software audit services, you can contact us and one of our sale’s reps will get back to you in under 24 hours.
Mergers and Acquisitions often prove a messy juggling act of trading assets, people, and a boat load of documents, leaving you dizzy and uncertain about where anything is anymore. While it may not seem that important with so much going on, many companies often neglect to examine how their software contracts will transfer between the acquiring company and the target company after the M&A is completed. At MetrixData 360, we have dealt with many companies who have found themselves in this situation and confronted with a tidal wave of complications and licensing issues at the very last leg of their merger and acquisition as a result. So, to help you through this transition and avoid this fate, in this blog post, we’ll go through your to-do list for making sure your software environment is in good shape for the transition.
Understand Your Software Licenses
Even before the move has begun, you’ll need to know if you and the other company are ready and capable of the move. This requires you to have a complete understanding of your software licenses and those of your target. Here are just a few of the questions you should have the answers to before you complete your merger and acquisition. You can consult both of your active quantities and products in use to find solutions to these questions:
When do you expect to integrate the new organization and their assets into your environment?
Who are the key contacts at either organization who will be responsible for providing data and information on the software assets?
Can you report on the licensing and quantities in production effectively?
What publishers does the other company have in their environment?
What products are they using from their publishers?
For each publisher, what volume license program are they using to acquire their licenses?
Do they have any special instructions, amendments, or exceptions that have been provided by the publishers in question?
What level are they regarding pricing tiers? For example, Microsoft’s EA has a waterfall pricing structure based on the number of seats you have. After the merger and acquisition, both of you may be pushed into a higher level with greater discounts.
What is the start and end date of their agreements?
How old is their technology? Will it be compatible with yours? If they have legacy software, your two environments may not even recognize the other’s existence.
Determine Software Compliance for Both Companies
According to MetrixData 360’s own CEO, Mike Austin, one of the most shocking things we see many CIOs confronted with during or after their merger and acquisition is:
“The shattering of their previously held belief that the acquired company is compliant. They are not expecting to be weighted down with millions of dollars’ worth of compliance issues. While it may not always be that extreme, quite often the perfectly compliant company they were signing up for is far from what they’re actually getting. Since not all licenses are transferable, not doing an assessment of the acquired company’s licenses across all vendors is just inviting future massive and unbudgeted compliance issues later on.”
Since many software publishers have an “affiliate clause” or its equivalent in their contracts, this means that whatever compliance issues that the other company has going into this arrangement will suddenly be your problem as well. Considering what a massive and unbudgeted expense compliance issues can be to companies, you should never complete a merger and acquisition without knowing where the other company stands with their various software vendors. If you don’t know what compliance issues the other company has, you’re bound to eventually find out. M&As are one of the leading factors that will initiate a software audit.
Contact the Software Publishers
Each of your publishers and the publishers of the other organization needs to be contacted and you’ll need to get copies of the purchase history reports for both you and the other company. These purchase history reports should include past purchases and current products with active support and maintenance. Most importantly, you should note any upcoming expiration dates your target has. You’ll need to work with each publisher one-by-one, starting with the ones who are closest to a renewal, and you’ll need to check what sort of new licenses you may need to purchase. This can be a whole other issue since purchasing the wrong number of needed licenses could mean compliance issues or wasted licenses, both of which could prove costly to you. A word of caution though: mergers and acquisitions can often trigger a software audit since software vendors will expect things to be disorganized and non-compliant immediately after the merger and acquisition is completed. While this step needs to be done, you should be careful when approaching your publishers and letting them know you are going through a merger and acquisition. It may spark their attention.
Once the merger and acquisition is completed, you may find that your combined software environments will have a lot of duplication in both licenses and services. There’s no need to have these competing elements in your combined software licensing environment as they will only serve as a waste of money and may cause budget issues later. Figure out which products and services can be removed and discontinued between the two of you and which ones are going to be maintained in the shared environment. This can also be an excellent time to do some spring cleaning and find unused and unnecessary licenses in your own environment.
Check Your Licenses for Transferring Legalities
It’s important to determine the exact process each publisher has when it comes to how licenses will be correctly transferred over to the ownership of the new organization that comes out of your merger and acquisition. If the licenses that you were intending to move actually do not have transferable rights, then they will be essentially useless after the merger and acquisition. You should also figure out how long the transfer process takes and when it can be started. And you’ll need to determine how easy new users can be added to the contracts or how critical software can be expanded into new environments. You might want to make note of any clauses in your target’s contracts that state that you, as an affiliate, will be roped into any compliance issues that the target is experiencing. This has, at times, proven a deal-breaker for companies going through a Merger and Acquisition. One company finds out that the other company has millions of dollars in compliance issues, a burden they’ll now have to share, and they then decide to back out of the merger and acquisition. It’s important to make sure you avoid this situation before you find yourself in the thick of it.
Measuring Software Compatibility Before a Merger and Acquisition
Mergers and Acquisitions can be a whirlwind of events and as much as it might add another insurmountable task to your plate, it’s important that you make sure your software environments are compatible and capable of blending properly. We suggest that, if you are acquiring the company, you audit the assets you receive as soon as possible, either immediately before the merger is complete or immediately afterward. This way you can identify any data gaps in what you acquired regarding deployment or licensing. If you are selling your assets, you may want to audit the equipment which is being traded as a part of the divestiture to ensure you are transferring only the licenses that you need to transfer and nothing more. This includes desktops, laptops, and servers, etc. Regardless of whether you are selling, buying, or a little bit of both, you need to make sure that you are prepared for when that time arrives, and MetrixData 360 is here to defend your interests. We’ve helped many companies get through their mergers and acquisitions while making sure they remain compliant and cost-effective. Make sure you check out our self-assessment service page for more details!
Microsoft’s Cloud Solution Provider Program has begun to build momentum in the software industry, and it may have caught your attention as an appealing option for Cloud deployment. If you are considering purchasing from Microsoft’s CSP program, it’s important that you weigh the pros and cons in order to carefully consider what is right for your business.
At MetrixData 360, we like to keep a finger on the pulse of the software industry, and, as such, we’ve noticed many of our customers are coming to us with questions about the CSP program and if it’s right for them.
In this article, we’ll go into the details of the CSP program and its benefits and drawbacks for potential customers.
What is Microsoft’s CSP Program?
The Cloud Solution Provider Program is a new way Microsoft intends to sell licenses and manage client’s accounts.
Instead of Microsoft selling licenses directly to their customers, they will be selling their licenses to Direct CSP Distributors, who in turn will either sell to Indirect CSP Resellers or to you, the customer. Indirect CSP Resellers will also sell directly to customers.
As a customer, you don’t have to interact with Microsoft and instead will merely have to manage the relationship with your Reseller and/or Distributor. Your Reseller or Distributor will handle relations with Microsoft and will represent you to Microsoft over any outstanding issues.
Your Reseller or Distributor will provide you with anything related to your customer experience, including negotiating exclusive discounts, customized bundles, support, maintenance etc.
Pros of the CSP Program
Monthly Payment Models
One of the main appeals that draws customers to the CSP is the month-to-month payment models that CSP offers.
This allows you to adjust for seasonal influxes of workers and customers alike. Not only is it easy to scale up, it is easy to scale down, which is not a feature found in Microsoft’s Enterprise Agreement (EA).
With the EA, while it was simple and almost expected for customers to add licenses to their final count at every true-up, it would be painful and almost impossible to remove any licenses, which often left customers feeling forced to buy more than they needed simply to maintain their EA level status and to keep Microsoft happy.
With the CSP, while there are other long term payment models available, there are no such restrictions that limit you to locking yourself in, and you are free to add and drop licenses from month-to-month as your needs dictate.
The billing that you receive is also supposed to be more detailed than that of the EA, allowing you to easily track your spending.
Microsoft’s EA required its customers to meet many rather tedious requirements in order to maintain their pricing level and the discounts that go along with it. These pricing levels are primarily dictated by the number of seats you need, and as of 2016, the minimum seats you need to qualify for the EA at all was raised from 250 to 500 seats.
This leaves a lot of mid-sized businesses in that 250-500 employee range in the lurch and looking for alternatives that will not force them to pay for licenses they don’t need.
This is where the CSP program comes in; with the CSP program, there are no minimum commitments you need to adhere to. This makes CSP ideal for mid-sized businesses and many former EA customers are expected to switch to the CSP for that very reason.
With the CSP however, there is no minimum seat requirement and no length of time you have to commit to, giving you complete freedom in how long you stay and how much you use.
You Get to Work with Your CSP Partner
As an individual consumer, you might know the pain of trying to get Microsoft’s attention. As excellent as they are at selling products, they often have difficulty providing meaningful customer service to every one of their customers simply by the sheer size of their business.
You can often feel like you’re little more than a number to them, which is why the CSP partner program offers a more engaging and personalized experience. Since your CSP partner will be handling the relationship with Microsoft, you will only have to handle your relationship with your CSP partner, whose role in this chain is to provide you with an ideal customer experience.
This means that they will be offering you around the clock support, assistance in migrating to the Cloud, and customizable solutions hand-tailored to your organization’s requirements.
In order to stand out in the market, CSP partners will be eager to provide you with deals and enticing offers and will often be more willing to negotiate pricing and bundles compared to dealing directly with Microsoft.
It’s Where Microsoft is Clearly Pushing Their Clients Anyway
It’s clear that Microsoft has a vision and that’s one where their platform, products, and business exist exclusively on the Cloud. They’ve been quite aggressive in growing their Azure platform, which is now sitting second to only AWS in size and selection.
They also have begun steadily making their Enterprise Agreement less appealing to mid-size businesses and pushing their clients into other revenues, including Microsoft’s CSP. In 2016, they announced that the number of minimum seats required for companies to possess an EA would jump from 250 seats to 500.
In 2018, Microsoft also removed programmatic discounts offered to Level A customers with a seat count between 250-2,399 seats, significantly deteriorating the previously superior pricing of the EA compared to other volume license programs. At MetrixData 360, we think this deterioration of the EA will continue eventually even to the Level B customers. The reason for this is a bit multi-layered but essentially, what the EA provided for customers was direct access to Microsoft, they could negotiate custom-made deals and required a large quantity of Microsoft’s time and money supporting customer-service infrastructures. What the CSP does is it allows the CSP partners to present to their customer’s a more fixed, non-negotiable pricing while also giving the CSP partners the task of handling customer relations.
While you should always make your business decisions in accordance with the goals and priorities of your organization, it is important to note that Microsoft is visibly pushing away from the EA and into other avenues, including the CSP program.
Cons of CSP
It’s in the Cloud
It might be a little bit of a no brainer but the CSP program is a Cloud-only program, meaning it won’t offer products that are only available on-premises. This may be a roadblock to some organizations who require that their software and their data to remain on-prem.
For other products that are on-prem, such as servers, you will need a different license for them. With an exclusive Cloud platform comes Cloud-related problems,, including but not limited to:
Security Issues
Data Ownership
Lost connection leading to downtime
Difficult to track software assets in the Cloud, often leading to rampant spending
Some of the Partners are Newer than Others to the Cloud Business
It can be a rigorous process becoming a Direct CSP distributor, and you’ll need to meet the following requirements:
You need to prove that you are capable of providing around the clock technical support.
You need to pass a credit check in order to purchase Microsoft’s support plan.
You need to have a customer billing structure already in place.
You need to already have at least one managed service, IP service, or customer solution application.
You need to have at least one Microsoft Gold Productivity Competency.
However, to become an Indirect CSP Reseller doesn’t require nearly the same level of prerequisites, since they’ll get most of their infrastructure, such as their billing and their technical support, from their Direct Distributor. As such, you may find that smaller and newer resellers are not as well equipped to deal with your unique business demands as they arise.
Ready for the CSP Program?
With an uncertain future ahead of us, it can be understandable to be hesitant when picking a long-term IT solution for your business. Getting saddled with a platform that will prove to only be a weight around your neck to drag you down is hardly an ideal situation.
It is always best to examine the pros and cons to figure out if CSP is best suited to your company’s software environment.
At MetrixData 360, we are offering a unique solution to help you see if your software environment is ready to make the transition to CSP. Our SAM Compass Services offers you the ability to monitor your software environment to make sure you are only using what you need in order to keep your software spending as low as it can go.
Our solution offers our customers the ability to take control of their IT budget by providing them visibility into their usage and offering more streamlined licensing solutions, with the help of our team of experts on your side.
If you’d like more information on our SAM Compass Solution, you can check out our SAM Compass Service Page.
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Merger and acquisitions can be quite polarizing experiences with some people liking or hating them. But in the wake of 2020’s rocky year (“rocky” would be a bit of an understatement), many big companies are coming out of their COVID-induced slumber to pick up the pieces of old deals before the expected recession hits home.
A merger or acquisition could be successful in seemingly every aspect, from transferring employees to picking and melding the buildings and inventory.
Yet, when looking at the newly reorganized company’s software assets, there is nothing but chaos. To make matters worse, software vendors will often expect this level of chaos and will target companies who have just recently gone through a merger and acquisition.
Shortly after the paperwork is signed to finish the Merger and Acquisition, a software audit will appear. So why is this mess so easily expected? And what can you do to ensure that your company is ready for this move?
At MetrixData 360, we’ve helped many companies work through their mergers and acquisitions successfully and have ensured that the melding of their two software infrastructures went as smoothly as possible (it helps that we have many years of software licensing, negotiation, and audit defense on our side).
In this article, we’ll break down three common software asset-related problems that arise during a merger and acquisition. Then we’ll look at solutions to help you prepare (and even avoid) them.
Common SAM Issues that Arise During a Merger and Acquisition
Problem 1: The IT Teams Are Not Involved in the Transition
Often the IT assets are ignored or managed with minimal assistance from either company’s IT staff (they might be brought on after the deal is signed and it is simply time to move the assets).
Then, when they are brought on, it is revealed in their attempts to merge that there are records that aren’t properly maintained, proof of licenses that are missing, or elements of the data which are incomplete.
This is mostly a result of the sheer size and complexity of both software environments. Software licenses, past contracts, and maintenance and support agreements all need to be sorted through so that you know what is installed, who has what, what kinds of licenses can be combined, which can be kept separate etc.
Problem 2: Assumed Compatibility of Software Licensing Infrastructure
Software licenses are not easily transferred back and forth between organizations. Since companies do not technically own the software they have a license for, they therefore do not have the inherent right to transfer those licenses from one location to another. It will not be safe to assume that all your licenses are fit to go through a merger and acquisition. The process of transferring licenses will also need to be carefully documented to prove you have the right to use your new licenses.
In many clients we have worked with, despite having seemingly successfully transferred their software licenses, they did not have the proper documentation to back up this action. You will need to carefully consider and read through your contracts to ensure that they can be moved to this new organization and that the move is done properly or else you may find yourself in breach of your contracts.
Problem 3: The Other Company’s Software Compliance is not Considered
This could have cost implications that your company wasn’t expecting to get saddled with. It’s important that you be wary of targeting a company that doesn’t have any sort of a software asset management strategy in place, since it may mean that you can be burdened with compliance issues later on.
Using Software Asset Management to Ease the Merger and Acquisition Transition
Software Asset management is an excellent way of getting control of your software environment, not just for the occasion of the merger and acquisition but for the long term as your new combined identities get to grow together.
However, if you already have the basics down, then you can use them during your transition.
Step One: Get Your Own Assets in Order
Make sure what you’re bringing to the table is organized and efficient. If you don’t have any software asset management strategies in place, now is a great time to get started.
Involve ITAM and SAM in the merger early on and have the teams from each company perform a self-assessment. This is an excellent way to not only assess what each company has internally but will also prepare you for an audit that might be caused as a result of completing your merger and acquisition.
What assets are being consumed by employees and at what rate?
What are the main opportunities to cut back on unnecessary spending in your environment (this will be useful as you move into potentially larger contracts)?
This self-assessment will create an effective license position. Your ELP will establish what licenses you have and cross reference that with the number of licenses that you are entitled to use. This is a great way of determining gaps in visibility and any compliance issues that you might have otherwise accidentally passed on to your new partner.
Step Two: Take a Look at Your New Partner
Since you are going to be working together, it is important that you are aware of your new partner’s software history and the current state of their software licenses. Follow each of the steps below to ensure that you will be able to mesh well with your software environment.
What is the current state of the company we are acquiring/merging with? Are they compliant? Are they at risk?
Do you have access to quantities and products in use?
Which price level are they in (i.e., Microsoft’s EA program has four price levels based on the number of licenses you buy)? Will your combined licenses bump you into a new bracket with certain vendors?
What is the agreement start date? What is the agreement end date?
Do they have licenses that you are lacking or vice versa? It may be possible to avoid purchasing new licenses when you could potentially trade with your target.
Step Three: Determine How Your Two Licensing Environments Will Fit Together
The last step you need to do is to figure out how your environments will work together. To do that, you’ll need to start considering the following questions:
Which products and services are going to be removed or discontinued and which will be maintained?
How will the publisher of each license be transferred to the ownership of the new organization and how long will the transition take for each product?
Do your contracts even allow you to transfer your licenses?
Who are the key contacts at either organization who will be responsible for providing data and information on the software assets?
This is very important to determine as mergers and acquisitions often result in employees being moved around, let go, or offered a retirement package. You don’t want to realize certain important people with critical information have already left the building.
Have a Stress-Free Merger and Acquisition
Mergers and Acquisitions can be grueling experiences that could take months, even before the pandemic hit. However, the last thing that you want is for your merger and acquisition to grind to a halt because your software environments are incompatible, which we have seen happen many times.
It’s important to be aware of this potential incompatibility before the last of the paperwork is signed, which is why many companies benefit from hiring MetrixData 360 to help them through this transition.
We know how to deal with the most tangled of software environments, find missing data, and create reasonable solutions to sticky software contract situations. If you’d like to learn more about how MetrixData 360 can help your company through your merger or acquisition, you can contact us for more information.
There are many things to not like about negotiations: the tension, the frustration, and the feelings of being overwhelmed or outmatched. Negotiations are an unavoidable element of doing business. Hiring a license negotiator can help ease the discomfort around the whole process.
Software contract negotiations can be quite overwhelming, due to software contracts usually being hyper-complex. There is also an added strain if the software vendor you are negotiating with has mission-critical software that you will need to run your business.
This is why it’s always a good idea when confronted with a software contract negotiation to consider hiring a negotiator who specializes in software contracts. But how do you start looking and what are the qualities of a good licensing negotiator?
At MetrixData360, we specialize in helping organizations negotiate more effectively with software vendors like Microsoft, Oracle, and IBM. Having engaged in this business for many years, we know the professional standards that software licensing negotiators should be held to, which is what we want to share with you today.
Why People Hire Software Licensing Negotiators
Organizations often have talented and experienced people who are sent to sit down and hash things out with the software vendors, however, it is important to consider the following factors when you decide to use internal resources to approach the software vendors:
Negotiations are very time-consuming. Microsoft’s EA renewals, for instance, will require a minimum of a month to prepare, but MetrixData 360 suggests that you start preparing at least five months in advance.
It’s critical to have a strong understanding of the particular contract that you are negotiating. Not only are these software contracts difficult to understand, they are also subject to change hundreds of times a year when you consider how many times your vendor might update their product line, their policies, etc. For one person to be an expert on even a single vendor would be considered an accomplishment.
It will be difficult to successfully negotiate a software contract without a strong understanding of your company’s software assets. It won’t serve your company in the long run if your only negotiation strategy is to fight for a discount. For instance, if you are overspending on software licenses that you aren’t using and your software vendor decides to throw you a bone by giving you a 10% discount, you’re still wasting money on those licenses. Hiring a licensing negotiator will help avoid overspending on licenses you don’t need, even if they are discounted.
If there is a way for you to cut back on spending on your software contracts and you go about removing licenses without the required care, often the vendors will respond by sending you a software audit shortly after the negotiation has concluded in order to make up for the lost revenue of your reduced license count.
What to Look for in a Good Licensing Contract Negotiator
If you’ve decided you need help in this endeavor, the last thing you want is someone who can’t deliver. An attorney might be a good idea when you’re shopping for someone who will have your back during this engagement but is not exactly necessary; instead, you should look for someone who meets the following criteria:
Experience with and Knowledge of Your Specific Vendor
Your negotiator should be able to come to the table having experience negotiating with this vendor before. This will ensure that they will have a strong understanding of your vendor’s current product line, their current contracts, and they can anticipate the typical escalation strategies of that vendor.
Strong Conflict Resolution Skills Paired with Excellent Escalation Strategies
There are times to keep the peace and times to throw down the gauntlets, and your negotiator should be able to tell the difference between the two and how to go about either of these approaches.
An Understanding of the Stakeholders Involved
How do you speak to a group of people when one wants to take your money, another wants to make sure you’re having a great experience as a customer, another who is here to make sure the contracts are legally sound, and someone who just stepped in to bring his boss coffee? It’s difficult, isn’t it? Sadly though, on the other side of the negotiation table, there are people who are brought in with different goals and different levels of authority (you wouldn’t frame your argument to just please the coffee guy), and a software negotiator must be able to speak to all of them.
A Strong Personality
It takes a certain type of personality to get the right outcomes from a contract negotiation. It takes a tenacious individual who cannot be intimidated while also being able to exhibit patience and humility. If you’d like to learn more about how you can work on becoming a strong negotiator yourself, you can check out our article: 5 Key Traits to Winning Contract Negotiations.
Your Options for Hiring a Licensing Negotiator
Hire an In-House Software Asset Manger
Many SAM experts come with contract negotiation expertise due to their in-depth knowledge of a company’s software assets. While this will allow you to have someone who shares your company’s goals and values, it will be unlikely that you’ll find a single person who will be able to master every single vendor that you have in your infrastructure. It’s more likely that you’ll need to hire a team of people, which will be significantly more costly.
Hire a Consultant
Outsourcing to a third-party is an excellent way to get experienced professionals the second they walk in the door. They are also handy because you don’t have to keep them on staff for longer than the engagement lasts, often making them a much cheaper alternative.
There is also the possibility of picking the members who will be a part of your team; you only need to pay for the people who will be directly useful to the project.
Why Picking MetrixData 360 as Your Software Contract Negotiator Is a Great Choice
At MetrixData 360, we are experts on the subject of negotiating software contracts on our clients’ behalf and have successfully negotiated over 1.5 billion dollars in software contracts.
Our clients find that bringing a MetrixData360 licensing expert onto their team changes the process dramatically and puts them in control of the software contract negotiation. We like to build multiple licensing models and provide a risk analysis of each. Not only do we have the skills, we also like to teach you what to say and allow you the opportunity to present it as your own findings to preserve the relationship with the vendor.
The MetrixData 360 Edge
When most people are faced with a difficult contract negotiation, they will often need data to prove their stance and to avoid any future audits that might be incurred from the negotiations. At MetrixData 360, we provide you with the solid information you need to present a strong offense and an impeccable defense in the event of a software audit.
The Kind of Support We Offer During the Negotiation Process:
We are there and have a plan for every stage of the negotiations phases.
Software vendors try to control the negotiation. We change the game and put you in the driver’s seat.
Divide and Conquer: We talk to all members of the vendor negotiation team to understand their biases and motivations.
We help you establish a proposal that will meet your goals, if not exceed them.
We work as excellent translators for technical jargon and present it to you in a way that is easy to understand.
You set the approach, tone, and pace of the meetings and we’ll follow your lead.
Contract negotiations, when it comes to software, can be confusing and seemingly hopeless, especially when your software vendors hike up the pricing every year. It can feel like you have nothing you can say in response other than asking who the cheque should be written out to.
However, it doesn’t have to be like this if you have the right person backing you; someone who understands your software licenses better than the vendors do, and someone who is willing to defend your interests and your goals tenaciously.
At MetrixData 360, we like to hold ourselves to a high standard of excellence when it comes to defending our clients during a software contract negotiation and we want to make sure you find someone who also meets those standards. If you’d like to learn more about how MetrixData 360 can help you realize savings during your next contract negotiation, you can check out our contract negotiation page.
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