The Virtuous CIO  

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January 28, 2010 — The Upgrade Treadmill, Part 2

Beginning the upgrade process often involves communications with the vendors. You may be talking with a reseller, or with the publisher itself. This can be a relatively pleasant experience; on the other hand it sometimes resembles being dragged behind a horse. Once you are in the hot seat as the CIO you will quickly learn which vendors are willing to work with you, and which ones are more concerned with keeping their hand in your pocket.

In spite of their reputation for playing games with licensing, Microsoft has been a decent vendor to deal with. As an academic institution we get very attractive license terms for most of Microsoft's applications. When we have to call them on questions related to implementations that may be to a greater or lesser degree academic, they show flexibility and a willingness to help us do things the right way. I have a full-time license administrator on the IT staff and it may well be the Microsoft representative recognizes she is talking to a professional on this end. But to sum up Microsoft has been very easy to work with.

Another accommodating vendor is Adobe. Like many companies, Adobe has a perpetual problem with software pirates. They struggle to construct license terms which are beneficial to their customers but also give them leverage against the less honest users. Sometimes these efforts have unintended consequences, particularly for academic users. I must say Adobe pays attention when the academic community starts screaming and yelling at them. They are typically responsive.

While we are on the topic, another company I feel I must mention is IBM. I think the biggest challenge in dealing with IBM is picking your way through the labyrinthine bureaucracy of the company. Some of their billing functions are just about impenetrable. On the other hand the IBM representatives will go the second mile in helping you put together a usable licensing package. Consistently they make it clear that they are here to help you solve problems and not just sell more software. If you drive down to the bedrock of this company, they fundamentally understand business.

A large company will have its fair share of idiots, and we have all had our experiences with them. There are vendors who work hard to earn your business and each of us can list examples. Then there are the other companies which leave you wondering how they manage to remain in business. They not only seem to make it as difficult as possible to work with them, but they are inventive in finding new ways to charge you for it.

At one time we had a close working relationship with a certain CAD vendor. They not only provided very attractive academic licensing prices, but they formally allowed us to proliferate the installations throughout our organization under that same academic license. So as a result the engineering group in our facilities operation used their product, and was very happy with it. However, during a routine upgrade the vendor representative suddenly informed us we could no longer use the academic version except directly in the classroom. They told us we were required to upgrade all our other licenses to full commercial, which took the pricing from about $350 per seat to something like $5,000 per seat.

Now I understand that these companies are not charities. Occasionally a vendor will come in and say something to the effect of, "I'm sorry we are having a price increase. But let’s sit down and negotiate a way to make this as easy as possible." When there is a two-way street you can usually work out something acceptable. You might not be very happy about it but at least you understand. Being blindsided however makes me furious.

When you get put in this kind of position where your vendors asking you to spend several tens of thousands of dollars, of which money you do not have in your budget, you start looking at alternatives. We discovered AutoCAD Lite would do most of what we needed to do, and was considerably less expensive than even the academic version of the higher priced spread. The incumbent vendor suddenly discovered that not only had we replaced the internal installations with AutoCAD, but we also made the change in our computer labs as well. So not only did the vendor lose our business, but our students were now studying the competitor’s software. Bad move on somebody’s part.

There are a few things that make me as seriously angry as when a vendor tries to shake me down. This sort of thing happens more often than you would expect. I have a general policy that when something like this happens, if at all humanly possible, I will never do business with that vendor again. Ever. And I tell my friends about it. And I watch for the opportunity to tell the CEO of the vendor company about it. Sometimes I get results.

I do not do this because I desire revenge, but because it is simply good business. I do, after all, know Who vengeance belongs to. I don't really enjoy collecting scalps, but a few trophies hanging on the wall often have a salutary affect on other vendors. Vendor management should be in the repertory of every good CIO. I have seen CIOs who love to play games with vendors, simply because it is… fun. I have seen others who use their vendor relationships to line their own pockets. It's easy to do and people are rarely caught. But in the long run you will be much less effective in your job. And you have to live with yourself.

Good vendor management accomplishes a number of things: first of all it saves your company money. In the current economy that is no mean feat. Secondly, in the long run you encourage the good vendors to do better and weed out the weak ones. A stable of solid vendors makes the CIO’s job much easier; and, by the way, makes him more successful.