Vendors admonished for "questionable" licensing tactics

The "unfair" licensing rules employed by the big software vendors are stirring up resentment among end users and giving the industry a bad name, according to Forrester.

Oracle, SAP, Microsoft and IBM all came under fire as the analyst examined vendor management professionals' and CIOs' attitudes to 15 "questionable" licensing policies.

Five policies were found to have triggered particularly wide resentment, with three quarters of the 151 end users questioned rating them as very or extremely unfair.

Chief among them was vendors retaining the right to change licensing policies at any time, which 57 per cent labelled extremely unfair. This could include publishers morphing "per-processor" licences into "per-core" licences by making a policy change outside of the contract.

The policy of packaging product enhancements as new SKUs also garnered widespread derision. Microsoft was cited as an example on this score for packaging improvements to Exchange and SharePoint as add-on Enterprise CALs [client access licences], instead of including them at no extra cost to customers who had paid software assurance on the standard CALs.

Next up was the tactic of repricing maintenance when customers want to scrap surplus licences. As the only major vendor to take this approach, Oracle came in for flak here.

Completing the "foul five" list of least-fair policies were counting all processors in a server, even if partitioned and insisting on purchase of all licences before implementation starts.

SAP was criticised on the latter score after the report found that some buyers had been left with millions of dollars of shelfware because they had not needed as many users and engines as expected when they paid upfront for three-year deals.

Report author Duncan Jones said many software vendors were boosting their profits with policies that annoy their customers.

"These policies are not universal – some software companies apply them all while others use only three or four – but the survey's result is clear," he said. "It reveals a high level of unhappiness with the traditional commercial model and five policies that trigger almost universal resentment."

The report went on to argue that buyers can drive change by rising up en masse and focusing on the most egregious policies. It cited an example in 2008 when SAP watered down an increase in support charges in the face of widespread customer protests.

"Sourcing professionals can increase their influence by directing concerted efforts behind some defined objectives rather than risk dissipating it across too many issues, and Forrester's survey has identified five clear targets," said Jones. "Sales reps may appear to be interested only in commissionable revenue, but higher up, the software companies want mutually beneficial commercial relationships."