The Mathematicians are in charge

Part I: The Vendors

When you think of software within your organisation you’d be forgiven for thinking that software vendors sole agenda is to empower your people or help your business to realise its full potential. It’s great marketing speak, isn’t it? In truth that’s what it is.

Let’s not forget that software vendors are also commercial Enterprises, like you they have shareholders, a board of directors and they’re driven with a constant desire to achieve revenue objectives to keep Wall Street happy and to keep their competitors at bay.

Whilst undoubtedly there are some incredible products out there, especially in the last couple of years, monetising your use of their software is their number one driver, because that’s their business.

There are super smart financial analysts (the mathematical scientists) with MBA’s sat in Silicon Valley talking incessantly about how they can “optimise revenue”.

  • How can we get you to use more software NOW?
  • How can we get our software so embedded in your Enterprise that you CAN’T rip it out and replace it?
  • How can we get you to move to our Cloud services quicker and faster?

Once those revenue objectives are agreed, that’s when the artists get involved, aka the marketing organisation.The most obvious way to achieve more revenue is to get more customers, which is fine for disruptive new entrants to the market, but client acquisition is expensive & tough. For those software vendors who hold a dominant market position they rely on client retention.

Why?

Most Enterprises use their software already and the software vendor’s CMO & Sales VP will tell the CFO it’s much more cost-effective & efficient to retain existing clients and up-sell/cross-sell new products.

As an existing client what can you expect?

If the artists have your contact details expect to receive:

  • Extremely targeted & psychologically-smart digital marketing as to “why you should use more, buy more, upgrade now”
  • Whitepaper downloads on “how customer X achieved Y & you could too”
  • Invitations to the latest & greatest London location for a “breakfast briefing”, “industry event”, “Gartner/IDC/Forrester briefing”
  • The “opportunity” to go to their Customer Briefing Centre in California/Germany/Singapore/Washington
  • The “opportunity” to meet with their VP Sales/CEO to give your “feedback” on their software & licensing agreements
  • An invitation to an elite networking group of like-minded customers – aka a Focus Group.

The list goes on ad infinitum.

Now, if the artists can’t persuade you to “buy more” and the woo department (aka sales) can’t give you a strategic rational to “invest” more. Then you’ll no doubt have one of the following proverbial sticks thrown at you.

  • Stopping support: the classic way to get you to move to the later versions of software.
  • Changes to the licensing rules: you’re covered under your current agreement, but we’re changing the rules in x months and then you won’t be fine.
  • Changes to the product configuration: in Product A you got X & Y, when you migrate to Product B, your license only covers you for X. You’ll need to pay more to get access to Y.
  • Changes to the licensing model: when you move to the Cloud they’re changing the licensing rules & the product configuration.
  • A legal letter / a formal audit request or the softly “off-the record” compliance conversation with the woo person warning you that they’re targeting similar Enterprises to yours.

Those mathematical scientists love making licensing so complex that you need an MBA to understand the minutiae of the licensing agreements.

The artists love making their solutions seem so attractive you know you’ll feel great when do purchase them.The woo-ers just love you, your children, and your football team. But of course, more importantly your ability to sign a deal.

Finally, if the scientists and artists can’t force you to spend more, often the only solution is for the vendor to bring out their wigs (i.e. the legal team)!

Here at Cloud Optics, we’re experts at dealing with the mathematicians, the artists, the wooers and the wigs. So much so, that you won’t need to spend any more time yet reading another whitepaper.

Now, if you’d like to go to a lovely restaurant in London, at a table with a fabulous view please do so. But choose your dinner date wisely. Choose someone completely independent who doesn’t rely on you paying more for your licenses to pay their mortgage. Instead, we’ll take you out and explain how we can save you money!

To be continued…

Leave a Reply

Your email address will not be published. Required fields are marked *