Mar 06, 2019 - 05:21 AM
As we're only a small customer, we don't have much bargaining power with publishers.
But I always treat it as a buyer's market instead of a seller's market. My biggest wins come from when I'm upfront to resellers at the point of approach that we have a strongly enforced procurement policy of:
+ needing multiple quotes for all orders
+ not accepting revised quotes (first submissions are treated as final submissions)
+ not having to go with the cheapest offering if there's a clear justification
so always give me the best possible price with excellent service levels or I'll walk away.
Walking away isn't difficult, because we're always being approached by suppliers we don't already use, or being assigned a new sales manager at existing suppliers. Take advantage of loss-leader offers and introductory pricing. As long as you're friendly, honest and non-committal, they keep coming back for opportunities.
Of course this doesn't help as much when there's only on supplier available (direct sales, official distributor), but always check.
Mar 06, 2019 - 07:25 AM
1) Obtain multiple quotes on each purchase/renewal, say 3. This has the advantage of creating the best economics on that transaction; however, it only works on SW that is commoditized. It also has the advantage of having you incent on the "best Cost". This can be a bad thing if its complex software and the VAR is providing pre-sales support.. at a low margin they can no longer do that.
2) Establish a Relationship with a Reseller and request "transparent" margins. This means, your org will agree to a 3-5% margin on the software BUT that you want it applied to the pricing they receive. There is a need for checks/balances; however, I have used a "bonus" system based on performance. It's much more complex to run this from a VMO perspective than strategy #1. I will say, I have seen SIGNIFICANT wins using it tho.
There are probably others... I would suggest reaching out to a guy name 'Christian Murphy" who runs softwarepsend.com and has a blog and podcast. He always has some awesome ideas ;) If you do tell him one of his listeners (me) loves his stuff.
Mar 08, 2019 - 06:41 AM
1) Know exactly what you need and why you need it (so they cannot oversell - and if they do its your desicion)
2) Ask loads of questions - including the margin they have applied to their cost - about the contract/terms/acceditation to supply
3) Get multiple quotes - but stick to a small number of suppliers and buy most from a single source
4) Go on value not price - a good reseller might not always been cheapest, but for ease and knowledge of your business and the knowledge and information they can pass to you will save you a fortune long term. But they do need to be kept in "check" - hence the multiple quotes. But when you need a favour.. they will be there for you.
5) Don't screw over the good ones. If the reseller has spent months working with you on a new solution working out design, construct, licensing, contract etc thde price may reflect this time/effort. They are never as helpful second time around. The other people quoting cheaper have just quoted off a list which takes no time or effort at all.
6) Be realistic with what you need to achieve (e.g. it has to be 10% cheaper) and reasons why (e.g. i only have x budget) as there maybe reseller wiggle room direct with the Manufacturer to support you
7) Be aware of "deal registration" - first reseller in on a deal may register it which gives them extra discount so others cannot steal (point 5 the reseller who did the work should have registered to avoid this scenario) so go to your prefered option first.
8) Where appropriate question about long term support and management of the contract - its ok for them to get your money for a one off deal, but what if you need support around something 3 months, 6 months, 12 months down the line.
9) Ask about how they manage renewals (where appropriate)
Licensing is generally not a single transaction conversation. It requires support to get it in place, support in managing moving through it and then support around renewal options down the line. Price (although should be fair/reasonable) is so much less a major factor as other items.
Mar 11, 2019 - 04:06 AM
What does a strategic relationship look like? It's where your reseller provides you with regular consumption reports in the format you need to upload licenses into your SAM tool. They will help you negotiate with vendors, doing options analyses of different licensing models to help you work out what's best for you. They may even do some basic SAM eg preparing ELPs and compliance reports. You agree a cost plus model (eg cost of the license +3% or whatever you negotiate). The higher the volume, the lower the margin, so you need to have a reasonable understanding of how many and what type of licenses you buy in a year.
They will also be keen to extend the relationship beyond licensing - do you struggle with your hardware and software support & maintenance? Throw it over the fence to them and they can handle the renewals for you and negotiate with the vendors to co-terminate the support and drive down the overall costs.
The main drawback of a strategic relationship is that you always have the gnawing worry regarding whether they are acting in your best interests. But if you actively manage your vendors and benchmark the service you receive and the costs against other companies in the market, then you minimise these risks, and you have a lot to gain.
A tactical relationship involves you going to 3 different resellers for every purchase. It involves a lot of admin, you are constantly struggling to ensure that you capture all your entitlement because you use so many different resellers and you're relying on your finance team to give you invoices to ensure you have proof of entitlement. You only receive short term tactictical advice and you need to make all the decisions about what is best for your business, without having access to the deep expertise that exists in most resellers.
When making the decision re whether you want to be tactical or strategic, you need to align to how your own business works. There is a trade-off between costs and service, and costs and quality, and costs and size. If your business is focused totally on cost and is willing to put up with rubbish service, then go tactical. If your business is willing to take the risk that it makes short term decisions that may backfire in the long term, then go tactical. If your firm is small and you can personally do all the admin involved in managing licenses and support & maintenance, then go tactical.
In general, the larger the business the more likely it is to recognise and realise the benefits of a strategic relationship and support you in achieving it. Small businesses and low margin businesses are more likely to prefer the tactical route.
If you want a strategic relationship, then go out to tender for it. Talk to a number of resellers to find out the sorts of services they can provide, then think about which ones you want to take advantage of. When shortlisting resellers, think about:
Their relative size to you - if there is a mismatch in size (ie they are much bigger or much smaller then you) then you will notice a real impact on the quality of service.
Are you a national or multi-national - if the latter, make sure that they provide the levels of service you need in the countries you are buying licenses in
What licenses do you need to buy - do you need to go to a specialist for some licenses eg engineering licenses; do you have a lot of requests for weird and wonderful licenses - can they deal with those, or will you end up needing to go direct to the vendor anyway, so you'll only be buying Microsoft licenses through them?
Once you are clearer about your requirements, shortlist 3 vendors, write an RFP document (your procurement team will be able to send a template), think about how you will score responses (this MUST be done in advance, otherwise you could be accused of being biased if things get nasty), send the RFP out to them, perhaps ask them to do a beauty parade as well as a written response, assess the results and pick the winner.
Your procurement team will be able to help with the RFP process - they do them all the time.
I hope this helps!