Economy Gives IT a Sword for Slashing Software Costs

Menefee said he has found that vendors are often willing to discount add-on modules or even throw them in for free. They have also become open to doing "a lot more legwork" on things such as evaluating Schumacher's business processes and how the use of software could save the company money, he said.

Users also might want to consider things that they would be willing to trade away as part of the bargaining process or would agree to do for vendors -- such as appearing on trade show panels or talking about a product to the media.

5. Consider new types of licensing agreements

Another possibility is to push your vendor to tweak or overhaul its software licenses for you, as in the case of Colon's retailer client. That could involve adding a cloud-based subscription option to an existing perpetual-use license, or pushing a vendor to adopt concurrent-user licensing.

Sixty-nine percent of the 78 IT managers who responded to the Acresso-SIIA survey said they preferred the concurrent-user approach over per-seat or per-processor licenses. And 70% of the surveyed vendors said they expected concurrent-user licensing to be one of their primary pricing models by 2010.

Usage-based pricing may also be an option. Altair Engineering, a maker of product life-cycle management (PLM) applications, is among the vendors that have adopted token-based, pay-per-use licensing schemes that let end users within a company share a pool of software licenses.

Tecosim, a German provider of computer-aided engineering services, has used Altair's token system for the past five years. Juergen Veith, Tecosim's managing director, said the tokens cover the use of Altair's own PLM software as well as integrated third-party products.

The token system "gives us a lot of flexibility," Veith said. "It lets us use the best software for each particular job." Using the tokens is also saving Tecosim money, he said, although he didn't disclose any hard numbers.

6. Switch to less expensive alternatives

Inexpensive or free desktop applications, such as the cloud-based Google Apps or open-source OpenOffice.org suite, have matured to the point where organizations might want to consider swapping out Microsoft Office, Fauscette said.

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