Monthly Archives: July 2008

Software Licensing Handbook Review by Brian Sommer

Brian Sommer over at Software Safari posted a nice review of my Software Licensing Handbook today.

Brian: thank you for taking the time to read the whole book and write the review!

What Jeff has done is dismantle a standard software contract. He has dissected its component parts into easy to understand sections that explain what a vendor wants, what a customer should ask for and what each party should be willing to agree to if they want to reach a fair decision.

I would call this book: King Solomon’s Guide to Splitting the Software Contract Baby. Vendors are surely going to hate this publication and that should mean it is must-read material for software buyers. I’d strongly recommend that selection team members, not just the in-house counsel, read this as it lays the groundwork for negotiations.

It might not be worth a million dollars as Brian’s tagline suggests, but I’m sure you’ll get your money’s worth.  🙂


Consortia – the other side

Jason Busch over on SpendMatters was talking recently about consortiums.  He was pretty positive about them – and praised their use as the “easiest way to save money while improving internal customer satisfaction inside a company”.

I’m not as convinced.

A few years ago, I was working for an organization that wanted to join a buying consortium.  The proposed result would be a buying entity that would supposedly garner savings as a result of larger purchases – thus passing along the cheaper per-unit costs to the consortium’s members… sorta’ like a Sam’s Club, Costco or BJ’s Warehouse – just at the large company level.  On its face, this sounds like a great idea.  Pay a small membership fee (someone has to get paid to manage the relationships), get large savings in a number of commodity purchases (paper products, general office supplies, etc).

Oh wait.  Did I say commodities?  Yes, yes I did.  Commodities are an excellent use for consortia buying.  They’re ubiquitous (everyone needs toilet paper and almost everyone’s buying the cheapest they can find), relatively easy to source (and hard to screw up), and bulk quantities clearly reduce overall expense.

But what if your consortia wants to offer something else… say, intellectual property?  Software, for example.  Now I think there’s a problem.  The member companies no longer have identical interests.  Your organization wants Exchange email… mine wants Groupwise.  You want an enterprise license … and I do, too, but my enterprise is 3x bigger than yours.  Consortia buying stumbles in the face of diversity of interests.

Another area where I personally had a lot of issues was the realm of cell phone and long-distance telephone plans.  The consortium wanted a cut of the plan revenue.  I didn’t want them to get money from me this way, as I would prefer to have more cost savings straight from the vendor.  Oh, and the consortium was buying a bulk group of “minutes” that were then allocated to the members.  If I didn’t meet my minimum usage requirements, I had to pony up (which is normal).  But the twist was that if any other member organization didn’t meet their minimum, I was also responsible for helping cover the shortfall.

So, how did I find out about all of these nits in the deal?  Well, me being me, I asked to negotiate the contract(s).  And what I got in return was a lot of static about how the contracts were already complete and that I simply needed to see/sign the Member Enrollment agreement to add us to the consortium.  I said no thanks – that I had specific needs and I wanted to have my own contract (where we could/would selectively incorporate terms from the consortium’s agreement).  Boy did that go over like a lead balloon.

What I learned by reading the consortium’s agreement (which they originally didn’t even want to give me) is that I’m ultimately paying for someone to negotiate a deal that’s good for them, not me.  When I wanted to change the terms with the vendors, they, of course, balked, too (they thought they had done-deals with the consortium and its members).

So the net result is that I’m not a huge fan of consortia buying.  Consortia are essentially negotiation and contracting outsourcers.  I don’t need help getting discounts or better deals… and I definitely don’t need “help” that only really benefits the consortium organization (and not the consortium members).  But I do see value in using a consortium to get the bulk-quantity ubiquitous products of everyday office living.  I suppose, as all else in life, the key is moderation and to read before you sign.

Server Problem

Sorry to anyone who tried to visit yesterday… a server-side setting was somehow changed during server maintenance.  It’s fixed now … and there will be a new post on Tuesday.  Enjoy your Sunday!

A Kiss is Not a Contract

Thanks to the folks over at ContractsProf Blog (one of whom teaches at my alma mater) for finding this (and thanks to Flight of the Conchords for writing/recording it)!

[The underlying humor on this is the concept of consideration – that there has to be a mutuality to the arrangement.  It’s the reason you’ll see “for good and valuable consideration” or “for one dollar and other valuable consideration” on some contracts.  Each side has to “give” something to the other.]


Airline Service… and contracts

When you buy a ticket to fly, you actually are saddled with an adhesion contract for carriage.  You know it as your ticket.  It’s an adhesion contract because you can’t fly without accepting the terms – and the terms are non-negotiable.  And while you may have seen the brief version of them on the back of your ticket, I doubt you’ve read the full version, so here they are for a few of the most popular US airlines:

American Airlines, Delta Airlines, Northwest Airlines, Southwest Airlines, United Airlines, US Airlines

In my local newspaper, they had a story today about how airlines are becoming more stingy at passing out hotel vouchers in the event of an unexpected overnight stay.  The article basically indicates that the airlines are blaming the reduction in “service” on cost-cutting measures.  Now, let’s forget for a moment that US-based airlines are exactly where they asked to be (deregulated) and for the most part, are struggling hard to survive.  They have a stranglehold on air travel within the US (and many have a significant overseas presence as well).  And in their time of crisis, while many more consumers decrease their flights and fuel prices skyrocket, the majority of airlines choose to reduce or eliminate service.  Which is interesting, seeing that they’re a service-industry.

But while I could debate the service issue forever, I find myself focused on the contract… my one salvation in the event of a serious problem with my trip.  I’m not a million-miler, but I do fly several times a year.  The increase in fuel costs actually pushes me towards flying, as I can get wherever I’m going more cheaply.  But with the decrease in service, fewer airlines offer routes to where I go.  As a Disney fan, my #1 destination of choice is Orlando.

That means that I really have two ways to get there expediently.  Delta and Southwest.  If I choose Delta, I know that my return trip is ALWAYS going to be delayed (in the dozen or so times that I’ve done the trip, it’s always happened).  But on only one of those trips was there an overnight-level delay… and of course, Delta blamed it on weather so as to avoid liability.  So while I’ve gone through dozens of delays (hundreds, if you look across the entire span of my life)…  I can think of only two times where I’ve been compensated – and it wasn’t by Delta.

If this was any other industry… any other situation… I would’ve expected at least something in exchange for my inconvenience.  Because I hold the ticket/contract relationship sacred.  I pay, they fly.  And as I’ve said in other places, I don’t think that the airlines would think it ok if I delayed payment (they would simply delay giving me the ticket).  So this mutual respect doesn’t seem to flow in both directions.

Southwest is eventually going to win this competition simply by delivering quality service … without cutbacks.  Oh, and don’t even get me started on the “oversold flight” issue.


Lots of new stuff today

If you’ve recently visited the regular blog site at www.licensinghandbook.com, you might have noticed a few new things.

First, I’ve changed the entire layout.  I thought it was time for a visual overhaul that made things easier to read and more accessible.  I’ve leveraged the power of WordPress and the skills of Mr. Michael Andrade.  He does great work.  Thanks Michael!  I also want to thank Kronick, an artist over at iStockphoto.  I’ve adopted several of his little-men graphics as the logos for various parts of this site.  But I was missing one for Symetrisk… and he created a DNALittleMan just for me.

Second, I’ve consolidated a LOT of various information here.  From now on, this is the central hub by which you’ll be able to continue to find great information about software licensing and contract negotiation.  But it’s also where you can find out more about me, purchase the Software Licensing Handbook and/or the Software License Risk Matrix, learn about the new Software License Education Series (coming soon) and Symetrisk (also coming soon).  Sites formerly found at http://www.contractnegotiators.com and http://www.symetrisk.com now redirect here, but if you’ve got them in your bookmarks, they’ll be kept active indefinitely, so you don’t have to make any changes.

Third, while you can’t usually see it from an RSS feed or standard web browser, reading most blogs via a mobile device is a pain.  So I’ve installed a mobile plugin to allow ease-of-reading for my mobile readers and anyone who is always on the go.  I have only been able to test it while looking via my Palm (I’m still lusting after the iPhone) – so if you see anything quirky, please let me know!

Fourth, I’ve added a forum.  You already know how much I want to hear from you.  Now you can talk without me starting the conversation.  All you have to do is a simple registration and you can begin posting TODAY!  I have created a few areas for sharing contract templates and documents… but the ultimate conversation is led by you.

Fifth, I’ve added a dozen or so behind-the-scenes features to make a richer experience.  I’ve added translation services for my non-native-English speakers, better search capabilities, more content and even book recommendations for my favorite contracts, software and negotiation-related titles.  To point it out again, there’s even a special area in the sidebar for suggesting blogging topics.

All in all, I think these changes are going to make the whole licensinghandbook blog experience a lot better for both me and you!

Oh… and while I’m on the subject of you, the reader, I just wanted to thank you all for your continued support and readership.  Last year at this time, I was getting about 10,000 hits per month.  Now it’s 40,000.  400% growth is pretty awesome and I appreciate your time!


Public Domain Tool

Ever wonder whether the copyright on a particular work has expired? Trying to figure it out amongst all of the various copyright extensions isn’t exactly simple. So Michael Brewer and the American Library Association has done it for you – with pinache! Check out the Public Domain Tool.  Make sure you read the astericks, though.