Some more tips for shoppers
Fun & Games with Licensing Structures
No-one can guarantee the future, and no-one knows this better than a software vendor. This is why almost all software licensing agreements include a very painful Day 1 cost. This way it does not matter whether the client’s implementation stalls, fails gracefully, or explodes on take-off; the software house would have booked substantial, non-refundable revenue. For every year after that you would also be expected to pay 20%-30% of the original price tag, usually in semi-annual instalments, in advance. Now if your software vendor had any confidence that you would rely on their product for a decade or more, they could have structured a more profitable deal for themselves by lowering the initial cost and increasing the annual cost, and herein lies the irony. The conspicuous greed of the initial licensing fee usually plays a large role in the client’s eventual dissatisfaction and possible decision to ‘ditch’ the vendor. If the product is eventually found to be deficient, the bank would have three options. It can litigate, or it can take the vendor to task and force it to deliver a suitable product, but unfortunately it’s very difficult to beat the vendor at its own game, and eventually most banks submit and accept the vendor’s assurances that “ all software is expensive” and “all software has bugs”, and “all considered, we’re still the BIGGEST player in the market”.
If the bank is still dissatisfied with the vendor, but signs an extension to its contract on the same or lesser terms, because it feels it has ‘no other choice’, the vendor will command the relationship from that point onwards.
But…there may just be a solution on the horizon which is proudly priced to demonstrate that we hope to be your solutions provider for the next 30 years! Our extremely small up front cost ensures a painless initial decision, possibly below the threshold for CapEx approval by your Investment Board. We believe that, the combined benefit of a low initial cost and a better software solution, make for the start of a beautiful relationship. And you will never have to argue semantics about whether your request is a “defect or an enhancement”. If your request benefits our overall product roadmap, it will be done under your support fee at no additional charge… Why not talk to us at RegCap? |
