Pay now, pay later

Perhaps the only thing you dread more than reviewing your data centre's cabling and network infrastructure is evaluating your array of software-usage contracts. They can be far more confusing and frustrating than your most chaotic wiring closet.

You can license software for servers or clients. You can rent it by the week, month or year. You can pay per user, processor or transaction or by business volume. You can try open source or community source. You can build it yourself from components and pay royalties or flat fees. And every once in a while, you can actually buy and own a program.

The choices for legally acquiring software are numerous. Some say too numerous. And it's getting worse - vendors continue to add options or change things for their own sake. It's as if software vendors have conspired to make the licensing process so awful that you'll think an application's bugs are pleasant by comparison.

One of the worst offences is capacity-based pricing. Users are telling Computerworld that their ability to deploy better-performing hardware is harmed because software vendors tie their pricing to machine capabilities. These capacity pricing schemes are primarily in the mainframe market, but database companies are beginning to push them in the server arena as well. This kind of price gouging handcuffs IT managers.

Some hardware vendors profess to hate these complex and greedy sales tactics, while others urge software vendors to steer clear of them because they slow shipments. Yet IBM, which may lose S/390 sales because of them, still sells some software with capacity pricing language in its contracts.

It isn't just capacity pricing that disturbs IT budget managers. In the server market, some vendors are revising their contracts to revoke ownership provisions. These nonpermanent licences might prove to be a revenue boon for some vendors, but they often force unnecessary business changes, as well as technology changes, on companies.

Every IT executive I've ever spoken to about this says paying for software value isn't a problem. But software vendors don't seem to care about value. They seem focused on getting users to pay much more in every conceivable fashion for much less. That may be clever accounting, but it's bad business.

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