Vital Analysis

Recent Events and the Economy Have You Second-Guessing IT Contracts?

A lot of service firms would like to chat with you about your integrators and outsourcers. They want to know if they can have some of that business. Some of their efforts are premature, some of it self-serving and some of it is fear mongering. We don’t doubt that their are problems out there. We beleive you need a solid risk assessment/management plan before you leap into bed with another service provider.

The economy presents some other opportunities for service buyers. With utilization and backlog dropping in many service firms, deals can be had now for the savvy services buyer.

Take a minute and click on the attached pdf.the 2009 Services Market - An Opportunity or Risk Nightmare?

If you’d like to chat about the opportunities and risks your firm faces with its third party service providers, give us a ring at: contact@vitalanalysis.com .

You Can Read Code - But Can You Read a Software Vendor?

Recently, Brian Sommer of Vital Analysis was interviewed for a brief article on software contract negotiations. The article was for the AirTran in-flight magazine Go. You can peruse the online version of the magazine here. The article is on page 59.

Here’s what Brian originally pitched to the reporter:

It’s critical for your readers to fight for these changes before they sign the contract. Once signed, negotiating leverage goes to the vendor or goes away altogether.

Here are some of the clauses I like to fight for:

material change of control - Few software companies or their products are the same after they’ve been sold to another firm. Sure, you can (and should) ask for software source code escrow but you need to carefully word the deal so that you get license, maintenance and implementation monies returned/reimbursed if the vendor is sold (or sells the software product line) to another firm during the first year or so of licensing the product. Be sure your material change of control covers asset sales, acquisition, divestiture, loss of founder and insolvency.

entitlement to any and all ’similar’ products - Too frequently, software vendors will use the maintenance monies you’ve dutifully paid them year after year to build an all-new product line. The problem comes up when they want you to pay a new licensing fee to get access to the new product that you helped fund. This one’s a no-brainer - you paid for it and you should get it.

discontinuance of application product lines - Vendors will cease to support old product lines. Make sure you know what this vendor’s policy for sunseting old products is and make sure your upgrade capabilities can afford or work as fast. 

true enterprise license - No one can accurately predict what will happen with their user count, hardware configuration, technology innovations, etc. over the next few years. However, many firms own a piece of application software for ten years. If you agree to a CPU pricing deal, what happens if you want to use virtualization technology or a new multi-CPU server? Make sure the license does not tie you to an onerous cost structure or a pricing model that becomes obsolete in a couple of years

lock in price escalation for maintenance and service rates - Signing a software license agreement that ties annual maintenance payments to an unknown cost is unwise. Vendors typically tie maintenance to a fixed percent of the “then current list price of the application software”. If a vendor raises their list price 10% annually but your business didn’t grow, are you getting value for the extra money you’re being charged? No. Likewise, if a vendor’s prior price escalations have frequently exceeded the CPI (consumer price index), what does that say about their operating (in)efficiencies or greed? CPI should be used as the escalator for most deals.

Brian has negotiated a number of deals lately for clients including recent negotiation for a large software suite for one client and a manufacturing plant acquisition for another. He has also been on the road a lot lately (e.g., Korea) conducting negotiations training for major corporations.  

 Looking to make or re-negotiate a deal? Drop Brian a line at contact@vitalanalysis.com . 

cross-posted to www.servicessafari.blogs.com

HRMC Acclaim - A Very Different/Powerful Way to Recruit Talent

Most application software is designed by automating a manual process. The automated version usually resembles the manual process in an almost exact manner. The new solution may be more efficient and less error prone but it doesn’t necessarily reflect new thinking, new approaches or new methods.

HRMC clearly turned recruiting on its ear. We’ve documented their approach in this detailed research report and we think you’ll find it very interesting and very thought provoking. If you are interested in a new way of recruiting, check this report out.

To order this report, please complete our report request form on the website. Report cost is $395.

We recently began coverage of Cytiva, the makers of Sonic Recruit and other HR applications. We’ve developed a research report on the company and its products. The report is available for $395 and can be ordered via our request form on this website.

Here’s an excerpt from the Solutions section of the report:

We recently developed a new research note on Sonar6 - a genuinely novel firm with a superlative performance management toolset. Actually, we were quite impressed with this solution’s user interface - be sure to check out their ‘helicopter views’.

The report costs $395 and can be ordered via our request page from this site. Be sure to check this one out.

Still a Strong Trajectory, Offering and Following

Our report on SilkRoad’s Red Carpet offering last year was one of the most requested reports we produced. Because of that market interest we sought out the SilkRoad executives at this year’s HR Technology show in Chicago to get a more detailed briefing on their products and their vision of the HR space. SilkRoad investor Flip Filipowski sat in on much of that conversation.

In short, we continue to be impressed with the company’s marketing efforts, the enthusiasm they project in the space, the additions to the product line and more.

The new report is much longer and covers more than just the RedCarpet product. OpenHire, WingSpan, GreenLight and Eprise are also covered in this new document.

This report costs $395 for a single-user copy. It will be available to requestors for no charge until December 15, 2008. To receive a copy, please submit a request through our web site.

This fall, Vital Analysis is producing a number of new reports as well as materially update a number of prior reports. Here is a partial list of upcoming reports:

- Cornerstone

- Cytiva

- HRMC Acclaim

- Jobs2Web

- SHL

- SilkRoad

- Sonar6

- WinShuttle

- Workscape

We are also preparing a number of blog posts on the Software & Services Safari blog. More details later this week.

Avilar: Will New Leadership Translate Into Market Leadership?

We recently spoke with the leadership of Avilar, a learning and talent management solutions firm. That briefing resulted in this 6 page research note.  Here is an excerpt from the Overview section of the report:

“We recently received a short briefing from Avilar’s new CEO, Tom Grobicki. Tom is not new to Avilar (he was one of the founders) but we wanted to hear his take on the company, its product line and its prospects.  

Avilar is a competency management and LMS (learning management system) provider.

 

The company believes that the continuing ‘graying’ or outright retirement of many talented workers will make talent management a critical business competency that many mid-large firms have not adequately addressed.”

 

This report is available for download for $395/single use copy. Reports can be ordered via our online request form or via email at contact@vitalanalysis.com .

 

CA Clarity PPM: Insight into Services Initiatives

For our second report in the PSA (Professional Services Automation) and PPM (Project Portfolio Management) space, we examined CA Clarity PPM. This product has its roots in the Niku solution that CA bought several years ago. Our assessment of the product line remains bullish as the product possesses considerable functional depth and is well-suited to internal service organizations. The software also integrates well with a number of other CA products and is, therefore, a core product for the company. 

The report has the following sections:

• Overview
• Who is CA Clarity PPM?
• Solution Functionality
• CA Clarity PPM in the Federal Government
• The CA Clarity PPM Difference
• The CA Clarity Customer
• Prognosis

The report is available for purchase for $395. Orders can be placed via our site’s request page or via email at: contact@vitalanalysis.com.  

New OpenAir Report

We recently completed the first in a number of PSA (Professional Services Automation) and PPM (Project Portfolio Management) reports that will be produced this summer and fall. We have started with OpenAir, a firm we have watched for some time. OpenAir has consistently received good word-of-mouth recommendations from users and was recently acquired by NetSuite (NYSE symbol: N).  

Here is an excerpt from the Summary section of the report:

On balance, we like OpenAir’s broad functionality and integration to numerous front and back office solutions.  We are generally optimistic about the acquisition by NetSuite but will watch this over time to ensure that OpenAir’s market reputation does not slip post-acquisition.

 

We believe that for OpenAir to move further up-market, it will need to develop additional internal capabilities or relationships with third-party integrators to serve the very largest service organizations in the world.  The scale of some of these significant “whale sales” could swamp either OpenAir or NetSuite.  We also believe that firms such as Primavera or CA will present a formidable competition in the highest levels of the marketplace with their Evolve and Clarity products, respectively.

This report is available for download immediately. It is priced at $395 and can be ordered via our online request form or by email: contact@vitalanalysis.com .