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For Sourcing & Vendor Management Professionals

Updated Q4 2010: Check Your Software License Agreement For These Common Flaws

Update Familiar Contract Clauses To Accommodate Technology Changes

December 23, 2010

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Why Read This Report

When working with individual clients, Forrester sees many software license agreements that are seriously flawed. Some common problems: the contracts fail to explain clearly what the buyer has to measure to stay compliant; place unreasonable restrictions on usage and/or deployment; and rely on terminology that will soon be obsolete, if it isn't already. These flaws result in audit problems, unexpected software costs, and, sometimes, legal disputes. Why do so many defects get past the lawyers' reviews? It's because technology is evolving so quickly that many legal terms that software vendors have used for years have become outdated. This report describes the issues that Forrester sees cause the most problems for clients, including some we first reported in 2008 and a few new ones too. It will also suggest what savvy software sourcing professionals can do to improve contracts that they negotiate in 2011, and to identify and mitigate the risks within their existing agreements.

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