With technology now a crucial part of modern businesses, many software vendors are enjoying strong growth as sales and licensing agreements help propel revenues.
However, the recently launched Campaign for Clear Licensing believes that this rapid, revenue-orientated growth is often detrimental to customers of software companies and their channel vendors.
Mark Flynn, the newly appointed chief executive of the Campaign for Clear Licensing, told V3 the objective of the not-for-profit organisation is to serve as a watchdog and to give customers a voice in a market dominated by vendors.
While software providers' services and products might aim to simplify the IT and business practices of companies, the licensing agreements and subsequent aggressive auditing that come with them are often less than clear to customers.
Flynn said companies are often encumbered by obtuse agreements that sign them up to unneeded upgrades and licences. Subsequently, when these companies are audited they face charges well beyond the amounts they budgeted for.
Naming two major vendors who do not make life easy for their customers, Flynn said: "The likes of Oracle have got a bad name in the marketplace. Microsoft is also seen as a reasonably aggressive auditor of their customers.
"Customers are not there to be taken advantage of and unfortunately too often vendors have a short-term view of their customers and that's leads to aggressive auditing and sharp sales."
As such, companies using business software and IT services could find that they are auto-enrolled on costly upgrade programmes or receive no support when services, such as cloud storage, go wrong.
Flynn referenced Oracle's automatic switching of its customers to its new in-memory storage as an example of when businesses fall victim to unannounced moves by vendors. The use of Oracle's new storage comes with a premium of £23,000 per licence, which could potentially bankrupt SMEs unaware of the automatic upgrade.
However, Oracle claimed this was not the case, with a recent blog post that said users will not be automatically upgraded.
“Is in-memory automatically enabled or not? The answer is NO,” it said in a blog post, that then detailed the technical background that showed why this was so.
With a background in the industry, Flynn said he understands that licensing agreements are crucial for vendors to generate an income and compete against rival, but he is critical of the fashion in which vendors supply their services.
"A vendor has got the right to enforce the terms and conditions of the licensing agreements a customer has signed up to, but a lot of the contracts are short-term [and] revenue orientated," he declared.
Flynn went on to explain that channel vendors further muddy the waters between vendors and customers. "Channel partners play the game of poacher-gamekeeper – they want to be that go-to outfit for best practice and knowledge for that customer, but they are also very interested in short-term revenue," said Flynn.
"They will achieve that by selling short-term licence rather than providing guidance on whether additional licences are actually needed. So there's a tension there between the end user and channel partner – where there's mystery and fear there's money to be made."
Keep your friends close...
To combat these problems and bridge the gap between customers and vendors, the Campaign for Clear Licensing aims to educate members of its organisation on the intricacies of licensing agreements and auditing.
Alongside this, the organisation will be lobbying vendors to adopt an approach that supports the customer rather than simply driving revenue through cut-throat sales deals.
Flynn stated: "We want vendors to align themselves with us and to want to work with us to be seen as a friend of the customer rather than seeing their customers as a feed for revenue."
However, as the Campaign for Clear Licensing is the first organisation of its kind, it may have its work cut out to establish a wide enough membership base in order to effectively voice the concerns and complaints of customers to major software vendors.
Flynn is optimistic about the potential of the campaign: "There is nobody out there representing the end user across the globe. So we are in a unique position to build consensus amongst our members.
While some vendors might not look favourably on a new organisation that aims to take them to task for poor customer relations, Flynn said that others, including Oracle, are happy to be in dialogue with the campaign.
Just three weeks into the UK launch of the Campaign for Clear Licensing means it is likely too early to predict how both vendors and their customers will react to the new organisation. However, the global ambitions of the organisation mean it is likely to be more than a flash in the pan.
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