After the dust clears
The software audit is complete. You are over deployed and non-compliant, you are holding your breath until you get “the letter”. The letter is typically a settlement agreement. Before panicking, realize that this settlement is proposed and that all settlements are open to negotiation.
Who do you need on your side?
The right parties need to be involved. Parties may include all or some of asset management, legal, or procurement. Basically, whoever has the right to negotiate has the decision point. Most of the time asset management takes a back seat at negotiation time.
Fines, fees, interest – OH MY!
The proposed settlement not only includes the license fees for which you are over deployed it also includes back maintenance charges. In addition there is a software audit fee, non-compliant fines, and interest on the months of being out of compliance. What you thought was going to be a few thousand dollars has snowballed into a six-figure number. But, don’t be discouraged as vendors know they will have to negotiate.
It isn’t all about the money
Well it is… but there are other non-monetary strategies used in negotiations. Regardless of the audit the vendor wants your business, you know that and they know that. It’s suggested to tackle the settlement by line item. Remember… EVERYTHING is negotiable.
- Over deployments – don’t pay today’s market value for the software; pay what it costs at time of deployment.
- Back maintenance charges on over deploys – investigate how much you actually used maintenance at all for the software; if minimal negotiate these back charges.
- Interest, fines, and additional fees – the most negotiable items, almost laughable, don’t pay these!
- Are you in a one year maintenance agreement with the vendor? If so dangle a pre-paid three year agreement with them. This is a powerful negotiation tool.
- Are there some products that can be rolled into a bundle? You may want to consider additional products offered by this vendor as a negotiation ploy.
Regardless of your negotiation tactic, when you make a concession expect a concession in return. And importantly, ensure the settlement is ‘one and done’ and the vendor cannot come back for more.
These things take time
Negotiations do not take overnight. Negotiations can take up to many months. The paperwork has to be vetted by each company’s legal team each time a new settlement offer is put forth.