- 11 Feb 2024
- 1 Minute to read
Be careful buying Enterprise Software
- Updated on 11 Feb 2024
- 1 Minute to read
I have been selling enterprise software and hardware for over 30 years. The change from straight licensing to subscription has been major for everyone.
The old way of selling the software licenses and then charging an annual 20 percent each year for upgrades and support was the cleanest and fairest, in my opinion.
If a company chose to not renew, they could still use the software. Sure, they would not have support and the software may stop working with operating system updates. But, they paid for the software one time.
Once a client decides on the solution they want, the modules and number of licenses to purchase takes some time. You don't want to be short, but you also don't want to over-purchase. And I always hold off on ordering the software until we are ready to install and implement because I don't want their 20% annual period to begin too soon.
Recently, I had a situation with a customer that is up for renewal on their annual maintenance. They have numerous scanning licenses that they no longer need. The amount of maintenance that they pay for these licenses is close to $15,000!
They requested to have those licenses removed. The vendor told them that was against their policy. First, the vendor said to them that they couldn't reduce licenses. Now they're being told that they can reduce licenses, but it won't reduce their annual maintenance.
So, once you sign the purchase order, you are stuck for that 20% plus until you stop using the software entirely.
I cannot justify any reason for a policy like this, except for company greed.
It would be great to have comments from end-users and technology vendors/partners. Is this a rogue vendor, and no one else acts this way? Or is this how many software companies operate now?
Thank you for your comments so I can reconcile this situation in my head and for future customers.