NET(net), Inc.


Term Interrelationships by jigordon
March 27, 2007, 4:02 am
Filed under: contract terms, negotiation, risk

If you’ve been following along with us in the last month or so, you’ll have realized that the problem and complexity with software licensing isn’t the individual terms themselves, but rather the interrelated-ness and exchange that transpires when you want to cover yourself.

A change in one term, like assignment, might affect a change in the license grant (such as the license metric), which has an effect on the initial price… and probably the maintenance price too. Which creates anxiety on the part of the licensee (who has a constrained budget), and possibly on the licensor, too (especially if they have a limitation of liability clause that’s tied to the price paid and as the price goes up, so does their liability).

Net-net is that what happens next is a comedy of errors. Both sides’ increasing anxiety comes across as either trepidation/hesitance with respects to closing the deal, or anger as a result of increased pricing and risk. What almost never happens (and what would prevent this increased anxiety and anger response) is an honest disclosure of interests.

The truth with regards to software licensing, and all other contracts for that matter, is that it’s a gamble… a risk. Each side is doing everything they can to protect themselves from every conceivable angle. Three page software licenses from the early 90s are now 30 page behemoths – written to close every gap, every loophole, every eventuality. It’s just not possible. Risk is the only true eventuality and you can’t entirely escape it. The best you can do is to mitigate it, and be honest with yourself and the other side about those things that scare you the most.

If you work together, you’ll find a lot of common ground… and ways to balance risk with the possibility of reward.

Advertisements

Leave a Comment so far
Leave a comment



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s



%d bloggers like this: