The Superbowl’s impact on Sourcing & Vendor Management professionals
As I live in UK, I tend to record major US sporting events and watch them the next day (the Superbowl doesnt start until nearly midnight). That means I have to avoid the internet, twitter, conversations with US colleagues, etc, for the whole of the following day so I can enjoy the game without knowing the score. One client nearly spoiled it for me by talking about the game in an inquiry, but I managed to shut him up. (I think he understood why).
What's this got to do with you? Well, I can now reveal that the reason the Colts weren't ready for that onside kick was that they were too busy discussing the other big news from Sunday, that SAP had fired CEO Leo Apotheker. My self-imposed media blackout meant that I missed the immediate blog storm and could read the later, more considered analysis, such as Paul Hamerman's, here: SAP Announces Changes at the Top; Hasso Steps Up .
One comment that caught my eye was SAP co-founder Hasso Plattner's statement that SAP would focus on "growth, margin and innovation". That sounds worryingly like SAP intends to continue to increase maintenance and cut down on support and enhancement delivery. Hopefully that isnt the case. Herr Plattner also talked about needing to regain customer's trust, which is much more encouraging. What does SAP need to do to win back customer's goodwill?
The changes at the top, SAP's recognition of its recent mistakes, and its continuing license revenue shortfalls give software buyers a great opportunity to influence its future direction on commercial matters. I encourage clients to push SAP, and other traditional-model software vendors, to give ground on issues that they wouldnt previously consider. We may not always get what we want, but eventually the message gets through. For example, in time SAP & its peers will have to say goodbye to:
- Maintenance on shelfware – customers need to be able to trim costs according to business circumstances. Buyers will no longer accept that they have to keep paying maintenance on licenses that they aren’t using.
- 'CPI' increases – why should software companies increase prices each year to cover inflation, when their support costs are such a tiny fraction of maintenance revenue? The market controls license prices — maintenance prices shouldn't increase when software list prices don't.
Irrevocable multi-year purchase orders – companies are happy to make strategic commitments to vendors, but they shouldn't have to place a huge PO for the complete roll-out program just so the sales rep can bank a commission check for the whole deal.
What's on your list? Which other traditional practices do vendors need to drop? And what's the next major software industry announcement to expect, presumably on Final Four weekend?