NET(net), Inc.


New Microsoft agreements: EAP “Enrollment for Application Platform” and EAI (“Infrastructure”) by scottbraden
April 21, 2010, 3:52 pm
Filed under: IT Strategic Planning, Microsoft, Negotiations, SaaS, Subscriptions, Total Cost of Ownership

Continuing its direction toward rental-based agreements, Microsoft has recently been ptiching EAP’s and EAI’s to some of its customers. 

Simply, these agreements are the “balloon payment, low interest mortgage loan” of the licensing world.  They look great right up until the time the balloon payment comes…

Visit http://www.netnetweb.com/blog/entry/new_microsoft_agreements_eap_enrollment_for_application_platform_and_e/ to read the full article.

Leave a comment


Microsoft offers true “rental” of Office, Windows by scottbraden
January 11, 2010, 5:07 pm
Filed under: IT Strategic Planning, Microsoft, Negotiations, SaaS, Software, Subscriptions, Total Cost of Ownership | Tags: , ,

In an interesting development which may be useful for many of our Clients, Microsoft has announced the ability to rent its software. 

https://partner.microsoft.com/40104043

And some great commentary by Mary Jo Foley, here:
http://blogs.zdnet.com/microsoft/?p=4930&tag=col1;post-4930

This is a new offer, but it’s not really the first ‘rental” deal that Microsoft has offered.

Today, there are several ways to purchase and use Microsoft products:
 – “OEM preload” – the typical way that Windows is sold, preloaded by the manufacturer on new PC’s.  Microsoft also offers a few other products via OEM, notably the home and small business flavors of Office. This license is a perpetual license for a one-time cost (typically included in the cost of the PC).
 – Full package product (“FPP”) or shrinkwrap boxes. Traditional retail packaging, this is a perpetual license for a one-time cost.
 – Volume Licensing – via the Open, Select, Enterprise Agreement structures – Microsoft customers can get volume discounts for full, perpetual licenses, and also purchase Software Assurance to cover future upgrades, which then become perpetual rights to the new versions.
 – Subscription models – Microsoft offers several “rental” programs via the various contractual structures.
Enterprise Subscription Agreement (most commonly for enterprise customers) or Open Value Subscription for smaller enterprises.  These contracts are structured similar to normal volume licensing deals; the main difference is that there is no “perpetual” component to the licensing; when the agreement ends, all rights to the software expire and the customer must remove the code from all the machines covered.
 – Various hosted / SaaS options – Microsoft and a large partner community offer online solutions for most of the business products in Microsoft’s portfolio. Recently, Microsoft has made a big push into selling Exchange and SharePoint services via the cloud, under their BPOS (Business Productivity Online Suite) brand umbrella.  They have also announced plans to deliver Office and other products under this model.  Again, this is a true subscription approach, so no perpetual rights are transferred to the end customer and usage rights terminate with the contract.
 – and finally, the new Rental offer, which is interesting in that it allows an owner of a perpetual license to make a one-time purchase, which grants the right to rent the software to other customers. 

On first blush, the new Rental rights may be useful in cases where clients need to have temporary usage of a product set on seasonal or project-based needs, where the user count will increase then decrease in a period of less than a year.

Leave a comment


MSFT is betting big chunks of cash on swaying customers to their hosted stuff. (Oracle, CRM, datacenter / cloud) by scottbraden
November 8, 2009, 4:04 pm
Filed under: Data Center, IT Financial Management, IT Strategic Planning, Microsoft, Negotiations, Oracle, Outsourcing, Risk Mitigation, SaaS, Software, Subscriptions, Total Cost of Ownership

Microsoft is aggressively discounting its hosted / SaaS solutions in order to gain market share, and I suspect, to sway customers from the EA / Select / perpetual license model, onto the rental / cloud / SaaS model.

Microsoft cuts prices on BPOS, to issue refunds  – 
http://ct.zdnet.com/clicks?t=475224883-f5935ee3a0b078029592318f09b1ea8e-bf&brand=ZDNET&s=5

Microsoft seeks to lure Salesforce, Oracle users with six months free of CRM Online
Microsoft chops prices of its hosted enterprise cloud offerings

 But you’ll note that’s only on the hosted offerings.

Also of note, Microsoft’s huge new billion $ datacenters in Chicago and Dublin are now open for business. With more coming soon.
http://ct.zdnet.com/clicks?t=475224883-f5935ee3a0b078029592318f09b1ea8e-bf&brand=ZDNET&s=5

On the traditional licensing front, Microsoft just announced price increases for SQL Server.

So, clearly, MSFT is betting big chunks of cash on swaying customers to its hosted services, and as a consequence the traditional licensing models are becoming slightly less attractive.  I would advise Microsoft customers to consider the true costs and benefits of moving from a traditional licensing approach, to a model such as BPOS.  As in most things regarding Microsoft’s sales practices, there are hidden factors that may not come to light unless you ask the right questions.

-Scott Braden

Leave a comment


Web 2.0 – What is all the hype? by garysa
September 14, 2009, 10:57 am
Filed under: Hardware, Microsoft, Oracle, SaaS, SAP, Software, Subscriptions

There appears to be a significant amount of buzz around Web 2.0, what it is and how do you get some…  If you do a Google search on Web 2.0, you are using Web 2.0 technology!  Just by the fact you are reviewing this blog post means you are using Web 2.0 technology. 

Why would a professional optimization firm write about Web 2.0?

The newest versions of applications, services and hardware touted by companies like IBM, Oracle, Microsoft and others are being sold as Web 2.0 necessities.

So what is Web 2.0?

If you click on some of the results from your “Web 2.0” Google search, many people say Web 2.0 is nothing more than a marketing spin on the natural progression of Internet technology.  So why then are Enterprises being encouraged to pay premiums based upon marketing and hype?  Continuing a tradition among technologists to buy the latest and alleged to be the greatest?  Beyond that, we have no clue!  But, we can try to put some context around what is Web 2.0?

Quite simply, one can look at a website or application as being Web 2.0 if it contains any of the following characteristics:

  1. A user centric customizable interface (i.e. use of widgets to customize pages)
  2. Community updates like those found in Blogs or Wiki pages
  3. Uses the Web as its delivery platform and is entirely browser accessible
  4. Allows for collaboration like that found in Instant Messenger or other Social Networking sites
  5. Utilizes user generated “Dynamic Content” for updates
  6. Software as a Service (SaaS) by definition, uses the Web as its delivery platform
  7. Provides for a rich use experience

Who can argue with those, almost like motherhood and apple pie (all good).  Those characteristics are so all encompassing, almost all software fits into at least one of the categories above.  Still, by using the latest buzz word and labeling products “Web 2.0”, technology companies are jumping at the opportunity to capitalize on the ambiguous definition of “Web 2.0”  and trying to use it to compel buyers to pay a premium to obtain it.  At NET(net), we consistently rally against hype and focus on business value received relative to financial investment expended.  This is where Web 2.0 falls flat (in our humble opinion).

1 comment


This Week on The Web 2009-09-13 (my birthday edition) by jigordon
September 13, 2009, 9:32 am
Filed under: contract management, copyright, current events, dispute resolution, EULA, force majeure, fun, information security, maintenance, pricing, SaaS, termination, trademark, TWoTW, warranty

It happens to be my birthday weekend and between eating some great food, playing Guitar Hero with my wife and hanging with the family, these are the things that happened around the web this week – maybe you already read about them, maybe you need to again – there were some REALLY great discussions going on.  Come join the party on twitter (follow me here and you’ll join the conversation live.)

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

Leave a comment


This Week on The Web 2009-09-06 by jigordon
September 6, 2009, 9:32 am
Filed under: communication, confidentiality, contract management, copyright, current events, Five Fundamental Skills, information security, IP Indemnity, SaaS, trust, TWoTW

The things that happened around the web this week – maybe you already read about them, maybe you need to again.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

Leave a comment


This Week on The Web 2009-08-16 by jigordon
August 16, 2009, 9:32 am
Filed under: assignment, confidentiality, contract management, copyright, Five Fundamental Skills, negotiation, pricing, risk matrix, SaaS, transfer, TWoTW

The things that happened around the web this week – maybe you already read about them, maybe you need to again:

Leave a comment


Four Disadvantages to Using SaaS for Your Small Business by jigordon
August 3, 2009, 9:32 pm
Filed under: EULA, risk, SaaS

This is a blog response to DreamSimplicity’s “4 Advantages to Using SaaS for Your Small Business“.  DS is correct, SaaS offers several great advantages that small businesses can exploit – such as obtaining access to enterprise-class software once priced outside non-enterprise reach.  But all is not rosy and wonderful in the SaaS world.  It pays to consider all options before moving ahead with any software product, and some risks are exacerbated by a SaaS environment.  Here are four to consider:

  1. You’re still small and probably have no leverage to negotiate the license.  Even SaaS vendors offer negotiable software licenses to customers who buy above a certain threshold.  As a small business, you’ll be less likely to meet that threshold and will be tied to their unmodified EULA.  Take the time to read this document carefully, it’s the setup for the next three issues.  Oh, and just because you’re small doesn’t mean you can’t TRY to negotiate.  ALWAYS ask for the changes you want – the worst they say is “no.”
  2. The SaaS provider is going to have your data.  Building your business from the ground up within one of these platforms is terrific.  However, once you mature to the point where you consider switching, you might only now start to consider how to get your data out of the system.  If you think of this up front, you might be able to get a small change to your contract to allow you easy access to your information.  If not, do the research to see how you can export data.  Zoho, for example, is awesome.  But there’s almost no way to easily get all of the data from a fully-populated database out of ZohoCRM.
  3. The SaaS provider is going to be storing your data.  Depending on your business, you might have certain regulations governing the acquisition, storage and use of the information you gather from customers.  Again, if you’ve clicked “I Agree” to the standard EULA, chances are, the vendor isn’t offering any real protection of data.
  4. You have to consider the potential for your provider to go out of business.  With the SaaS model, you only have access to the application for so long as the provider is viable.  If the provider goes away tomorrow, so does your access to the application (not to mention your data).  As a small business, you probably won’t have access to some of the enterprise-class contract provisions here either – such as escrow, guarantees for unexpected terminations… heck, even termination notice.

So, while SaaS can offer extremely valuable opportunities, there are pitfalls, too.  Just be aware – for even if you can’t do anything about these issues from a contractual perspective, you can try to deal with it from a business planning perspective.

1 comment


Interesting Tidbits by jigordon
June 19, 2009, 9:32 am
Filed under: fun, law, SaaS

I’ve not done this before, but given that I just got off vacation and have an inbox that would scare most people, I thought a few tidbits of things passing my desk might be of interest to you:

The Ideological History of the Supreme Court of the United States

A White Paper on Insurance Coverage for Cyber Security Losses (e-mail required)

The Applicator on “Chiseling on Demand”

Thirty Interview Questions You Can’t Ask and Thirty Sneaky, Legal Alternatives to Get the Same Info (hat tip to D.C. Toedt)

Leave a comment


Salesforce.com calls for End of Maintenance by jigordon
April 29, 2009, 9:32 am
Filed under: contract management, current events, license grant, maintenance, pricing, SaaS

Below is the contents of an internal salesforce.com memo CEO Marc Benioff shared with Vinnie Mirchandani (and posted on his blog: deal architect).  I’m pasting it here for simplicity’s sake and because of the power of the message itself.

“For ten years, we’ve been driven by a simple vision: The End of Software.  Now it’s time to take on a new challenge: The End of Maintenance.

Let me tell you about a customer that I met on our Cloudforce tour. This customer currently uses Siebel software to run her call center.  She pays more than $15 million a year for the privilege of having to implement the updates that Siebel sends her.  That does not include backup. Or disaster recovery. And of course, it does not guarantee that she will be using the latest technology.  The maintenance agreement only assures her that her outdated software will continue to work.  She is paying tolls on a road to nowhere.

We can help her, and many other customers, and deliver much more for a fraction of what they currently pay in maintenance. It’s time to open up a new front in “The End of Software”– one that is long overdue.

It’s time for The End of Maintenance.

Every year, companies spend billions on maintenance fees and get relatively little in return. Maintenance fees cover updates that are mostly  patches and fixes, but they stop far short of the kind of innovation every that enterprise needs to survive.  Companies pay to keep the past working and they end up doubling down on technology that can never keep up with their needs.  The fees that companies pay have actually been rising, from something like 17% a few years ago to numbers more like 22% today. Every four or five years, companies are paying for their software all over again.

It’s time to set these businesses free and make them successful in the Sales Cloud,  Service Cloud and on our Force.com platform.

Our new mission begins at a critical time in the economy, when companies are questioning conventional wisdom as they never have before.  That, of course, extends to their IT budgets as well. The CIO is in a tough spot right now.  Corporate budgets are tightening.  And our rivals in the legacy client-server world are using this opportunities to extract more money from their customers by raising maintenance fees.  I call this phenomenon “the compression of IT” and it resonates with just about every CIO I speak with these days.

We have a better vision. We sell our customers a service and every customer is able to use the latest. Innovations are included. Upgrades are automatic and invisible. Customers’ intellectual property of customizations and extensions is rigorously preserved, and carried forward without disruption.

The service gets better, not just less buggy. That’s not what people are getting for all those fees that supposedly buy them “maintenance.”

It’s time to set these business people free: to give them the experience of being wildly successful in the Sales Cloud, the Service Cloud, and in their own unique applications that they can build on our Force.com platform. This is the time to do it, because this is when people need it: their IT budgets are tight, their business situations are critical, and their old-world software vendors are taking care of themselves instead of meeting the needs of their customers.

We’ve raised people’s expectations for better alignment of business value with IT cost. We’ve earned our leadership position in enterprise cloud computing. It’s time for us to set people free from paying more and more to get less and less. It’s time for The End of Maintenance.

Aloha,

Marc”

Leave a comment

« Older Posts