Steven Zolman

Apr. 24,2012

Many of our clients continue to be furious about their inability to effectively manage the economic value of their ongoing support costs for major software platforms like SAP and Oracle. Clients are often frustrated that as they deploy and consume the technology, integrate it into their environment, develop a center of excellence for maintaining the value of the ongoing solution, and as their support calls go down, and the critical nature of their support needs diminish, their annual maintenance costs continue to go up, year after year. During the past several years, many clients have taken a closer look at these costs, and among other ...

Steven Zolman

Mar. 23,2012

You hear it all the time… Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), but what does it really mean? How is it really defined? What is the difference between IaaS, and PaaS, and SaaS? How does it differ to what we have done before? Well, I think all those questions and more are answered with the following graphic. If you start with the Infrastructure as a Service (IaaS) stack, you see that a supplier provides networking, storage, servers and virtualization, while you manage the platform and the application. If you then move up to Platform as a Service (PaaS), you see that in addition to ...

Steven Zolman

Mar. 23,2012

Suppliers offering software as a service (SaaS) solutions via ‘cloud’ computing, enable clients to pay a subscription for access to the software rather than making huge capital investments in software licenses and infrastructure, as well as the accompanying costs for systems integration services that often are 3 to 5 times of the originating investment. It’s quite clear that SAP and Oracle are now taking a much greater interest in this market. Perhaps the event that memorializes this interest most convincingly is the recent acquisitions of employee performance management SaaS providers, SuccessFactors by SAP and Taleo by Oracle. In stark ...

Steven Zolman

Jan. 30,2012

At the end of November, 2011, Oracle reported its Fiscal Q2 results, and for only the 2nd time in the last 5 years, reported a sequential reduction in annual maintenance income. See chart below: This is a significant development, mostly because of how Oracle charges for maintenance. When Oracle sells software licenses, it also includes the first year of annual maintenance at 22% of the net license value – and there is no option to ‘unbundle’ and not pay the first year maintenance charge. So, if Oracle sells $2 billion of software in a given quarter (which it roughly did in Q2 of Fiscal Year 2012), that means Oracle would also gain $440M in ...

Steven Zolman

Jan. 30,2012

For a while, it appeared that SAP was doomed. Oracle was winning a high percentage of the deals, and was seen as the innovator, promoting vertically integrated technology solutions that combined hardware, software and services, while SAP was often viewed as being left behind, trying to bilk maintenance out of its legacy customers. There was renewed talk of an SAP acquisition by IBM, or maybe HP, or perhaps Microsoft, or even, God forbid, Oracle. SAP has seemingly stabilized, however, and we believe will actually show some good results in Q4. We believe SAP licensing revenue will be up around 15%, and profit margins will improve, to hover ...

Steven Zolman

Nov. 22,2011

In a recent Information Week article (chart below), we came across this chart of negotiated discount levels, and we were troubled to learn that only 8% of the companies surveyed get greater than 35% discounts most frequently. Having been helping Clients get greater economic and strategic value from their information technology investments for over 10 years, NET(net) has collectively negotiated over 15,000 deals in the field, and we can’t remember a single time with a single supplier that we haven’t been able to help our Clients achieve greater than a 35% discount level off a supplier’s list price. These imaginary “list prices” for software ...

Steven Zolman

Nov. 22,2011

The Business Software Alliance (BSA) has recently announced that they're going to offer a "certification" for IT SAM. http://www.itassetmanagement.net/2011/11/15/vendor-audit-forbearance/ The requirements aren't fully defined on their website, but the gist is that you pay the BSA to get certified. You allow the BSA to audit your implementation of their standards (who knows what else they may audit while there). And then you get a two-year audit forbearance from BSA member organizations including Adobe, Microsoft, Symantec and others (see the entire list here). Our recommendation? Do NOT Sign Up for this program without carefully reading the ...

Steven Zolman

Nov. 22,2011

You’ve heard them talking about it in the hallway… the great deal they got from that supplier. Ever wonder how they knew it was a great deal? Was it based on the starting point of the negotiation in comparison to where things ended up? Was it based on the discount they achieved off the supplier’s imaginary list prices? Was it based on how well the supplier faked their disappointment at having to concede so much value? Was it based on how many times the supplier said it was the best deal they had ever given to anyone? Or, was it based on one of the oldest tricks in the book… the supplier asking them to sign a confidentiality agreement because ...

Steven Zolman

Oct. 24,2011

As you may have noticed, Microsoft recently revised the terms and conditions of most of its major agreements effective as of 3 October 2011. In this blog, we will provide our take on these changes, and provide a unique, exclusive opportunity to existing Clients only. For prospective clients, contact NET(net) for more information on our comprehensive services including: Advisory, Optimization and Negotiations, and Managed Services as it relates to Microsoft investments. Once again, Microsoft has revised its standard contract terms and conditions for customers who purchase Microsoft licenses via Enterprise Agreements, Select Agreements, and ...

Steven Zolman

Oct. 24,2011

The Four Core Functions of Strategic Supplier Management Needed to Manage the Shifting Line of Accountability Deeper Into Your Supply Chain: There is a trend in the industry that is moving the line of accountability from within the Client’s walls – deeper into their supply chains. We have seen this traditionally in outsourcing deals, where Clients are deeply reliant on their supply chains for entire integrated business processes – but with the emergence of Software-as-a-Service (SaaS) and Cloud Computing, NET(net) is seeing a deeper level of need for an integrated and managed supply chain in what used to be more captive areas of spend for ...