Micro Focus did not have a good 2019 and customers should expect to see more Micro Focus audit notices this year because of it. On Valentine’s Day of 2020, Micro Focus’s Executive Chairman Kevin Loosemore has stepped down from his role as a leader after fifteen years on the job and a 6-8% dip in sales with a staggering 30% revenue drop.
Those are some harsh numbers to work with and it would probably be a bit nerve-racking for Micro Focus’ customers or prospecting customers? Is now the time to buy or is it better to jump ship now? At MetrixData 360, we have gone toe-to-toe with Micro Focus on many different occasions and we have gotten to know their business strategies quite well. With these tough times ahead for Micro Focus, here are a few things that you can expect as a Micro Focus customer.
1. Expect More Micro Focus Audits in the Future
Micro Focus is already known to be an audit-heavy software vendor, but this extra pressure to drive revenue back up in the wake of such a challenging year could mean that if you have Micro Focus software, a software audit might be around the corner.
Being prepared is the best thing you can do. To get ahead of your Micro Focus Audit, here are some tips specifically geared towards Micro Focus’ tactics of auditing, according to ITAM’s Review, along with some of our own findings:
- Pay close attention to Micro Focus contracts, make sure that terms like “authorized user” are clearly defined, since Micro Focus has the tendency to put vague terms in their EULA that can create confusion that is exploited later in an audit.
- Ensure the licensing metric as outlined in your contract is also clearly understood to everyone internally. A lack of understanding will make it unclear what you’re supposed to count to remain in compliance or how they will collect or count usage data in an audit.
- If your Micro Focus products are accessed through servers like Citrix or through VDI’s, make sure that you are licensed according to Micro Focus’ metric. Micro Focus will want to see that you have control overs in place to ensure who has access to their products. Otherwise, they will require that everyone with access to the products is licensed (access rights), as opposed to simply licensing those who use the product (use rights).
2. HP Products Might Be the Target for Audits
Micro Focus purchased many software products from HP Enterprise back in late 2016 for $8.8 billion, and since then we haven’t seen them target HP users in any of their audits. Up until now, they have mostly been auditing for products such as Rumba, Attachmate Extra, and their Resource Access Control Facility (RACF).
With their recent revenue challenges, we may begin to see audits expanded to include legacy HP Products since it is a viable area for software audits that they have not exploited as of yet.
If you’d like to learn more about how you can get ahead of the auditors and be prepared for your next software audit, check out our article, 5 Secrets to Prepare for a Software Audit (And Save Money).
3. Now Is the Time to Negotiate
If you’re expecting a contract renewal with Micro Focus soon or if you want to get a contract in place with Micro Focus, this might be your time to push for the deals you want.
Micro Focus is not in a place where they can risk losing deals to competitors, so this situation might give you the foothold you need to start maximizing the value of your software with Micro Focus.
Here are some tips to help you prepare as you enter negotiations with Micro Focus:
- Consider the stakeholders. The people involved in carving out this deal for you may have different goals within their ranks. Some may be paid based on the revenue they can generate, some on your satisfaction as a client. Make sure you phrase your arguments in a way that appeals to each.
- Prepare for a contract renewal like you would for an audit – because one might be coming soon afterwards. If you walk away from a contract negotiation having managed to cut your spending, chances are Micro Focus will compensate for the losses by sending you an audit. It would be a smart move to perform an internal audit; you should know your usage and your license requirements. This will not only get you ready for any potential audit, but it will also allow you to make better spending decisions during the negotiations.
- Be Ready to Apply Leverage when needed. A well-timed call to the right person can be very effective to unblock a stalemate in the process.
If you’d like to learn more about how to strike up a deal that serves your company’s software needs, check out our article, Guide to Negotiating Software Contracts.
Going Forward With Micro Focus
The software industry is a fast paced one and it’s important to keep ahead of the curve. It’s unlikely that Micro Focus will find themselves out of the game just yet, they have enough revenue to pool from their contract renewals but this heavy hit could mean you’ll start to see some changes in the company if you are a customer of Micro Focus or are considering signing a deal with them.
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