What Every Enterprise Software Vendor Should Tell Their Customers

Monday Dec 8th 2008 by Joshua Greenbaum
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The recession means that it’s in the interest of both software vendors and customers to work together like never before.

There’s no time like the present for specific, dramatic, and concrete statements on what enterprise software customers should expect from their vendors in the coming year.

Customers are, like everyone else, scared, very gun-shy, and loathe to buy things they don’t know if they can afford or if they really need. So visibility into the future of enterprise software has become as clouded as everything else in this current economic mess.

It’s time to part the clouds and, if not find the silver lining, at least provide some concrete guidance on what enterprise software vendors are prepared to do for their customers in the coming year. This is as much about what the vendors can do for themselves as for their customers; in tough times like this, there should be less and less distinction between these at times adversarial partners.

There’s a lot of precedent for coming together in times of disaster, and for using that cohesion to build a stronger, and more perfect union. This recession, I believe, offers such an opportunity.

What follows is a template for a speech, or press release, or Youtube video, that I think pretty much every software vendor CEO could, and possibly should, make. Here goes:

My dear customers,

These are the worst economic conditions that we have seen in our lifetimes, and chances are things are going to get worse before they get better. I want to state categorically that we are in this together, and for once I really mean it.

Our continued survival depends on your continued survival, and in that regard I want to tell you what I’m prepared to do for you. And what I’m hoping you’ll do for me.

I’m rolling back maintenance costs by six percent points until the recession is over. I realize I’m going to get clobbered by Wall Street for this, but, frankly, our stock is so far down it won’t make that much of a difference.

What I want you to do in return is spend that six percent on some of my company’s new products. But only if they make sense in terms of your strategic needs. And that will be my responsibility: To make sure my development people are churning out the products you wish you could buy, if only you had some available capital to do so.

I’m also going to develop ROI cases for every product I sell. Every one. I want you to be able to walk into your board rooms and the office of the CFO and make a measured, rational case for my company’s products.

But I’ll need your help to do that: I want you to start measuring how your company uses software – and derives value out of it – so that I can build a strong, data rich set of ROI cases. The problem with ROI has always been the lack of hard data, particularly on the “before” picture of how companies use the software my company wants to replace. Help everyone better understand your internal ROI, and we’ll all get smarter in the process.

I’m also going to take on more responsibility for implementing my company’s products, and take as much of that responsibility – and cost -- away from the big systems integrators who have been jacking up costs in the enterprise for way too long.

Don’t worry, for my channel partners in the mid-market who are delivering value, your positions will be secure. But you integrators serving my large enterprise customers: you’re on notice to either be part of the cost reduction imperative or get out of the way. I won’t tolerate price gouging, runaway costs, or any other excesses that impinge on the TCO of my customers and ruin my company’s reputation in the process.

I’ll need your help here to. We often only find out about problems in SI implementations after the project has gone south and our products are being blamed. I’ll open up an ombudsman’s office to help manage these relationships, and I expect you to use that office to keep everyone honest and all of us informed of problems before they get out of hand.

Another promise I will make to you is to simplify the terms and conditions of my company’s engagement with you. I will make contracting and pricing more transparent, and will encourage you to work with independent contract negotiators to make sure that your needs are being met in the contracting process. Our contracts with you must be mutually beneficial, and free of gotchas and trick clauses that only a high-priced lawyer can understand or like.

In turn, I want you to be more forthcoming regarding your needs, and be better prepared to negotiate in good faith too. That means knowing what you need and want before you start the negotiating process, and then having the professional staff in place to make sure that your needs are being met in the process. And if you don’t have the staff to make the negotiation work, I’ll help you find an independent third party to do so.

Finally, I want to offer you a performance guarantee for every product or service you buy. The guarantees will be based on realistic service and performance levels, and calculated based on the ROI analysis we provide to you. That guarantee will include a further reduction in your maintenance costs if, due to some error or problem on our part, the software we sell you doesn’t meet a minimum standard ROI in your industry.

What I want for this guarantee is a willingness to dramatically shorten the approval process for my company’s products. One of my biggest costs is the time it takes to close a deal: If you will help me shorten that time, I’ll help you mitigate some of the risk by making sure the product meets your needs, or I’ll take a hit until it does.

My final pledge to you is that I will make this recession the one in which we change forever the nature of our relationship, moving from merely talking about partnership to actually living the concept. If you join me in this experiment I can guarantee that we’ll all survive, and hopefully, prosper, together. To do otherwise, in my opinion, is to lose an opportunity that may never come again. I hope you agree.

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