Industrial Distribution

Steve Epner

Contracting for software
June 26, 2007

I negotiate many contracts for clients. Over the years there have been many changes. Over the next few weeks, I will be posting comments related to contract negotiations for ERP software that have surfaced lately. In all cases, I welcome the feedback from our software friends as to what is to be expected, what is truly necessary, and what they might even admit is part of the past.

To begin with, I had to laugh at a recent contract that included a paragraph for reimbursement of telephone fees for connection to a customer’s remote computer. My guess is that there are IT managers that do not remember having to dial in at 900 baud to debug a system. In this case, when I pointed out the antiquity, they did agree to remove it from the contract.

More onerous, and one I would like to get input from the business community was a discussion related to disaster planning. As background, the customer lost their primary computer during hurricane Katrina and is now very aware of the need for business continuity planning. As such, we recommended that they plan to have a backup site in a remote warehouse in case of another disaster.

In this case, the vendor suggested against a second site to load share during normal operations and have a second site ready to switch to in case of an emergency. Here is the rub and my question.

The two choices were to have the computer waiting, but when the disaster occurs, we would have to apply for a transfer license at a relatively high fee and wait 3 to 5 days for approval and the right to load the software so they could get back in business. Of course, that is unacceptable to anyone in business.

The second option was to license a complete second system – at a 40% discount, plus pay maintenance each year for the right to turn it on if a disaster occurred. My personal reaction was not very positive. Why should they have to pay for a non usable system (remember, load sharing would not work) that might never be used?

The answer was – that is how everyone else does it. Even though I did not believe that for one minute, I thought I would ask. So far, I have not found many vendors that believe they need to charge for the right to start up a remote computer in the sole case of a disaster.

Even 20 years ago, I remember being able to keep a back up copy of source and object code in case of a potential disaster. What has changed?

Tell me what you think.

Posted by Steve Epner on June 26, 2007 | Comments (0)