Enterprise agreement: What should “getting the best deal” really mean?

The name of the game with any software licensing agreement is to get the best deal, but most executives equate this to discount. And, while we love discount, you always have to look at the longer term pitfalls or benefits. Much of the time, a sales rep offering you a discount – say 20% – on a large enterprise agreement negotiation, it sounds great. But, when you look at how software licensing works, the changing dynamics and business goals of a company and the upcoming changes (and, boy, are there a lot of those at companies today), that 20% discount may save you in the short-term, but in the longer term, you’ll end up spending more because you haven’t planned for the long game and there is little or no flexibility in your software license agreement (SLA).

So, what should “getting the best deal” from your software vendor mean? Yes, sometimes it does mean getting the best price. That’s definitely a factor, but you also have to look at:

  • Flexibility and scalability
  • Ensuring best Terms & Conditions (this is probably the most important factor)
  • Lowering your annual costs (e.g. support and maintenance) – which means you have to look at proactively managing the initial purchase carefully otherwise you end up with an ongoing annual payment for licenses you don’t need or use
  • Correctly match the appropriate licensing scenario to each organization (with Oracle, there are too many factors that could increase or decrease cost)
  • If you pay attention to all of the above, you will get the best deal – from best pricing to best value.

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