LinkedIn and First Impressions

Steve Gutzman

By Steve Gutzman, ICN

If you’re a Millennial, you’ve no doubt had the parental talk about being careful with what you put on your Facebook page. After all, colleges and companies routinely include this as part of their admission screening, and one odd entry may give the wrong impression. And with online fraud costing banks and insurance companies a fortune, they too are analyzing people’s online behavior. If you post an entry for public consumption that says you’re on your way to Barbados for a much-needed two-week vacation and are burglarized the next day, do you have a claim?

On the business side of the fence there’s LinkedIn – the de facto social media page for business. Any “parental advice” needed here? Surely this group is meticulously prudent about what they post. Unfortunately, despite plenty of articles written about “social selling,” most dismiss it as a passing fad — for what else could explain why a “star” salesperson for an elite enterprise software vendor would feature a margarita in their profile picture?

The VP of sales of a software company recently shared with his sales team one of those mysterious “industry statistics,” claiming that 70 percent of their customers/prospects look at their profiles on LinkedIn. The only thing surprising about this comment is that the number is not closer to 100 percent. Why wouldn’t a buyer want to know as much as possible about the person hovering over them with a contract and pen? A little bit of research could serve up a welcoming icebreaker like this: “It appears that you have been with five software companies in the last eight years – tell me again why I should make a five-year commitment to you.”

Which begs the question: “What does your profile say about you if you are in sales?” Does it say you love your company, or does it say you’re looking for your next job? Does it say you’ve helped your clients achieve their goals, or does it say you’re a great closer? Does it say you’re a good listener and never presume to know all the answers, or does it say you’ve attended 10 straight 100-percent clubs?

The sales law of first impressions of the face-to-face kind states that you are probably not going to close a six-figure sale in under 90 seconds — but you can sure lose one. First impressions of the online kind can be just as discriminating.

Steve Gutzman is a senior advisor at ICN and a 32-year veteran of the high-tech industry. You may contact him at sgutzman@dobetterdeals.com.

http://DoBetterDeals.com

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The Power of No

By Steve Gutzman

It is important to be comfortable saying “no” in a negotiation. Not all terms need to be agreed with, not all best and final prices are best and final, and not all deals need to be done. Unfortunately, many inexperienced negotiators think they must hang on at all costs until a deal is done. For them, saying no to a deal is like saying no to a free lottery ticket … it just might be the winner, and they can’t afford to pass up the jackpot.

From the buying side, preparing for a negotiation requires an understanding of the best “no deal.” The value put on the best no-deal option sets a limit that any agreement must not exceed in order for the buyer to agree. It becomes the point that the buyer will not go above. From the selling side, the best no deal becomes the level that the seller will not go below.

William Ury, in his best-selling book Getting to Yes, calls this the BATNA, or best alternative to a negotiated agreement. According to Ury, “The BATNA is the only standard which can protect you from both accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept.” In its simplest form, this concept means that if the proposed agreement is better than the BATNA, accept it. If the agreement is not better than the BATNA, continue negotiating. If the agreement cannot be improved, consider withdrawing from the negotiations and pursuing an alternative proposal or walking away from the negotiations altogether. Each side typically knows its own limits, which must continually be assessed and reassessed as new information unfolds. The problem is that many negotiators have only a hazy sense of their own no-deal options or how to value them. At a very basic level, buyers are taught that unless they hear no at least once, they are leaving money on the table. It’s part of the process and can be an important tactic. But let’s explore the use of no from a strategic standpoint as well.

To finish reading this artcile, click here.
http://www.dobetterdeals.com/articles/tips-and-tactics/2013/009.htm

Steve Gutzman is a senior advisor at ICN and a 33-year veteran of the high-tech
industry.

Versions, Editions, Downgrades Are Key to Microsoft License Compliance

Horwitz_Candid_2

This is a Part 1 of 2 by Rob Horwitz, Directions on Microsoft

Customers who acquire a license for a particular product version and edition may deploy an earlier version or different edition in its place under certain circumstances. These licensing rules, called downgrade rights vary not only by sales channel where the license was purchased but also by the particular product line, including which specific version and edition was licensed. Organizations that understand downgrade rights as well as other rules associated with product versions and editions can minimize risk by avoiding common license compliance issues and save money by averting unnecessary license purchases.

How Offerings Are Categorized into Version and Edition

Generally, when a customer licenses Microsoft software, the license is for a specific version and edition of the product.

Version

  • A version is a major release of a software product, denoted by one of the following:
  • A year (for example, Windows Server Standard 2012)
  • A release number appended to an existing version (Windows Server 2008 R2)
  • A sequential number (Windows 7, Windows 8)
  • A new naming designation (Windows XP).

In addition to new features and various technical enhancements, a new product version is often accompanied by changes to the product’s use rights, licensing model, pricing, or packaging (edition lineup).

Minor updates to a particular product version—typically delivered in the form of patches, security updates, and service packs—are usually provided for free. However, the right to use new versions, regardless of whether they are acquired via perpetual or subscription licenses, involves a fee.

Perpetual licenses, the most common license type, grant the purchaser the right to use a specific product version in perpetuity. The latest version of a perpetual license can be acquired through purchase of a new license or by virtue of having active Software Assurance (SA) on a preexisting license as of the date a new version becomes available to volume licensing customers. (SA is an add-on to perpetual licenses that offers version-upgrade rights and other benefits in exchange for an annual fee based on the underlying license.) If a new product version is licensed via a subscription rather than through a perpetual license, the subscription always includes rights to use the most recent version available, as long as the subscription is active.

Edition

Microsoft commonly offers several variations of a product (or product suite), called editions. Each edition offers a different collection of product features or use rights and is sold at various price points. When a new version of a product ships, all associated editions are usually released at the same time. Some editions of a product may be specific to a particular sales channel; for example, an edition might be available through volume licensing programs only.

Common names used for editions of client-side (desktop) applications or application suites are Standard, Professional, and Professional Plus. In the case of Office suites, the main differences between editions are which individual applications, such as Access and Outlook, are included and the presence of a few specialized server integration features, such as the ability to automatically archive Outlook data to Exchange Server. Common names used for editions of server software are Standard, Enterprise, and Datacenter. What differentiates various editions of server products can vary widely depending on the particular product and product version, but common differences include technical features of interest to IT professionals rather than end users (such as scalability, high-availability, and security capabilities), use rights associated with virtualization, and, occasionally, the licensing model. Sporadically, Microsoft literature misuses the term “edition” to distinguish between the various Client Access Licenses (CALs) associated with a server product, such as the Standard CAL and Enterprise CAL for Exchange Server. (Directions considers this a misuse of terms because edition-related concepts, such as step-ups and edition downgrades, discussed below, aren’t applicable to CALs.)

Customers with active SA coverage on a lower-level edition license can exchange it for a higher-level edition license through the purchase of a Step-up License. The Step-up License fee is equal to the difference in edition license prices plus the difference in SA fees for the period remaining on the current, lower-edition SA term. (In the absence of a step-up option, a new higher-edition license would have to be purchased in full.)

Version Downgrade Rights

Version downgrade rights entitle the owner of a product license to install and run an earlier version and equivalent edition of the same product in its place; for example, allowing a customer with a Windows 8 Pro license to use Windows 7 Professional instead. By downgrading, a customer does not forfeit the right to switch to the licensed (more recent) version at some point in the future.

Version downgrade rights are important because Microsoft typically stops selling a product version once a newer version becomes available; therefore, buying the latest license and exercising version downgrade rights is often the only option for licensing an expansion in deployment of a noncurrent version. This is often important for maintaining standardized configurations. For example, today, a customer wanting to deploy a new server running Windows Server 2008 Standard edition would purchase Windows Server 2012 Standard edition (the current version) and exercise version downgrade rights. (Note that for products licensed under the CAL licensing model, if a customer downgrades the version of the server software, the CAL version need only match (or exceed) the running version, not the version of the server license. For example, if a customer with a Windows Server 2012 Standard edition server license exercises downgrade rights to run Windows Server 2008 Standard edition instead, clients need only Windows Server 2008 CALs to access this server, not Windows Server 2012 CALs.)

When downgrading, customers are responsible for finding installation media, although Microsoft’s Volume Licensing Service Center (VLSC) site generally provides at least the two prior versions of each business-related product.

Volume Licensing Offers Greatest Flexibility

The degree to which version downgrades are allowed depends on the distribution channel used to acquire the license.

Volume licensing. For licenses acquired through volume licensing programs, version downgrade rights generally provide the ability to substitute any previous version. This applies to CALs as well—for example, a SQL Server 2012 CAL may be used to license access to SQL Server 2008 R2, SQL Server 2008, or any previous version.

OEM and retail. OEM licenses for Windows Professional (and Windows Vista Business) generally confer downgrade rights to the two prior versions. For example, Windows 8 Pro licenses supplied by OEMs include the right to downgrade to Windows 7 Professional and Windows Vista Business, but not Windows XP Professional. Organizations that purchase PCs with Windows 8 Pro licenses and deploy Windows XP Professional in its place are at risk of license noncompliance. To remain compliant, the customer has a few options, including enhancing version downgrade rights by adding SA to new Windows 8 Pro PCs or purchasing new computers with Windows 7 Professional OEM licenses instead of Windows 8 Pro (an option that should be available until at least mid-2014).

Rules for other OEM licenses as well as retail licenses vary, with licenses for server software generally providing permissive version downgrade rights and licenses for client-side applications, such as Office Home and Business edition, providing no version downgrade rights at all. However, volume licensing rules allow SA to be added to many types of OEM and retail licenses within 90 days from the date the licenses are acquired (for example, to Windows Professional and Windows Server OEM licenses). If SA is added to such licenses, volume licensing’s more liberal version downgrade use rights apply.

Edition Downgrade Rights

The edition downgrade use rights, sometimes referred to as down-edition rights or cross-edition rights, allow a customer to install and run a different (generally lower-level) edition than the one purchased. Edition downgrade rights are provided for only a few Microsoft products—the most prominent being Windows Server and SQL Server. They are commonly used in conjunction with version downgrade rights to allow a customer to deploy an earlier version of a different edition of the product. One example is running a SQL Server 2008 R2 Standard edition instance on a computer that is assigned a SQL Server 2012 Enterprise edition license. There are two major reasons why edition downgrade rights are occasionally provided.

Edition eliminated. Sometimes Microsoft removes an edition from a product’s edition lineup. Since the company typically ceases sales of all editions of a product version once a newer version becomes available, buying the latest license and exercising edition downgrade rights (combined with version downgrade rights) is often the only option for licensing expanded use of an old edition. For example, with the introduction of Windows Server 2012, there is no longer an Enterprise edition; customers can run past versions of Enterprise edition (such as Windows Server 2008 R2 Enterprise) by acquiring Windows Server 2012 Standard or Datacenter edition licenses and exercising edition downgrade rights.

Simplify virtualization. The second major reason for providing edition downgrade rights is to simplify licensing for virtualization scenarios. Often customers want to consolidate new as well as legacy server workloads by running multiple instances of a product on the same physical hardware, with each instance in its own virtual machine (VM). Higher-edition Windows Server and SQL Server product licenses (or sets of licenses) combine the right to run multiple instances of the software within VMs on the licensed hardware with edition downgrade rights so that customers do not need to be concerned with which particular edition is running within each VM. For example, a server licensed for Windows Server 2012 Datacenter and SQL Server 2012 Enterprise can be used to run VMs that are a mix of new and old Windows Server and SQL Server versions and editions.

Part 2 of Versions, Editions, Downgrades Are Key to Microsoft License Compliance will be out on Tueasday of next week.

Thanks to Rob Horwitz and Directions on Microsoft

The Challenge with Buying Technology

By Steve Gutzman

  Technology – information or otherwise – has always been a tough subject to discuss, to explain, to comprehend, to predict, and most important, to buy.  Why is that?  One reason is that it is very difficult to predict its usefulness, longevity, or value over time.  Even the people who develop technology have a tough time with this.  Some examples …

“The world potential market for copying machines is 5,000 at most.”  These are the words of an IBM executive in 1959 to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production.

“There is no reason anyone would want a computer in their home.”  Such is a comment from Ken Olson, the president, chairman, and founder of Digital Equipment Corp., a manufacturer of big business mainframe computers, as he argued against the personal computer in 1977.

“There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States.”  This was Thomas Craven, Federal Communications Commission member, in 1961.  The first commercial communications satellite went into service in 1965.
But there have been some predictions that proved to be pretty accurate and quite relevant to our industry.

Moore’s Law, which was coined by Intel co-founder Gordon Moore in 1965, states that the number of transistors on a chip doubles every 24 months.  It has been the guiding principle of the high-tech industry and explains why that sector has been able to consistently announce products that are smaller, more powerful, and less costly than their predecessors – a price-performance curve that other industries can’t come close to.  The interesting thing about Moore’s Law is that it is not a law of physics.  Rather, it is just an uncannily accurate observation on what engineers and computer scientists, when organized properly, can do with silicon.

Gilder’s Law, named after the visionary author George Gilder, states that bandwidth grows at least three times faster than computer power.  This means that if computer power doubles every 24 months, then communication power doubles every eight months.  The backbone bandwidth on a single cable is now a thousand times greater than the average monthly traffic exchange across the entire global Internet five years ago.

And finally, Metcalf’s Law, named after Robert Metcalf, an originator of Ethernet and the founder of 3Com, states that the value of a network is proportional to the square of the number of users; so, as a network grows, the value of being connected to it grows exponentially, while the cost per user remains the same or is even reduced.

Whether examined separately or collectively, these three laws are driving our industry to new heights.  But they also present some big challenges for those of us who are in the “buying trenches,” for we have to figure out how to put all this breakthrough technology to good use.

What we know about the world doubles every 10 years, and information technology is leading the way.  Magnetic nanodots will soon enable storage of over one billion pages of information in a chip that is one square inch in size.  This will be followed by imaginary interfaces, iMAX at home, content-centric networking, massively parallel cortical simulators, and quantum computers.  The pace of technology invention is accelerating exponentially, and how we buy it must keep pace.  And as we will see, not only is technology changing rapidly, but our vendors are also more sophisticated in how they bring their solutions to the marketplace and in the selling techniques they use.  Therefore, we cannot rely on the old tried-and-true buying techniques of yesteryear.  We must continually upgrade our buying skills, techniques, and processes.

Remember, if you don’t have a plan on how to buy technology, you will default to the vendors’ plan on how they sell technology.

Steve Gutzman is a senior advisor at ICN and a 32-year veteran of  the high-tech industry.  You can contact him at
info@dobetterdeals.com .

Are You Acquiring Results or Resources?

 by Joe Auer

Are you acquiring results or resources? The answer to that question will yield a fifth important, essential “truth” whenever you negotiate a technology deal. About six months ago, I mentioned 10 of these truths, and detailed four of them.

The answer to this “results or resources” question establishes which side will bear responsibility for the results you’re expecting from a deal, and you need that answer before your acquisition process begins. In a “results deal,” the vendor is responsible, while in a “resource deal,” it’s the customer.

For more than 20 years, I have testified as an expert witness in court cases involving customer-vendor disputes, and almost every one revolves around the question of who’s responsible. In most of these cases, contractual responsibility for the success of the deal is unclear or mutual, or the vendor’s form contract has disclaimed any responsibility. The bottom line: If you, as a customer, fall short in a contract of clearly and completely assigning full responsibility for final results to the vendor, you’re responsible.

A results deal. In a results deal, you, the customer, effectively get the supplier to fully accept the risk of failing to produce the solution, or the expected outcomes or results. If the vendor’s representatives talk about “solutions” to your executives or end users, the vendor is held accountable for producing them.

This sounds good, but you can shoot yourself in the foot if you’re not careful putting the deal together. You might say, “OK, we have them committed to results. But we’re going to manage the deal. After all, it’s our money and our project.” Don’t do it! That shifts some responsibility for results to you, and the vendor is off the hook. The vendor must have complete authority to have complete accountability.

Another thing you might say is, “We have them committed to results, but we’re going to tell them the policies, equipment and staffing levels they must use.“ This also ruins a results deal. I’ve seen countless vendors avoid accountability because they were “forced” to do things according to their customers’ dictates. The customers got too proscriptive and shared responsibility for the outcomes.

Another important point about a results deal: Make sure your obligation to pay a vendor is triggered only by its producing the agreed-upon results, whether by reaching certain milestones or upon project completion.

If it’s a results deal, why should a vendor’s invoice force you to pay? Why should a set monthly date, the signing of a contract, accepting delivery or anything short of contracted-for results require you to pay? Make sure your money is tied directly to the vendor’s performance. The satisfaction of having a good contract is exceeded only by holding payment until the vendor produces.

A resource deal. In certain instances, there’s nothing wrong with a resource deal, especially if you don’t expect the vendor to produce the final results or outcomes. Maybe you just need some equipment, software or support to help you produce the results. Actually, sometimes you can’t predefine the results, or you may just need some tools to distribute — like 3,000 desktop PCs. Or maybe you need help on a general software development team or ongoing maintenance work and the results aren’t predetermined. These are resource deals. In these deals, you must pay attention and manage the resources, tasks, time frames and progress, because you’re responsible for the results.

The first thing I do when I’m asked to help on a deal gone bad is try to determine whether it’s a results or resource deal. Who has the responsibility for the outcomes? In most deals I look at, the answer is unclear. If that’s the case, you’ll never win a dispute that goes to mediation or court, where you’re trying to blame the vendor for not producing the results or solutions that it so eagerly promised verbally during its sales pitch.

IF YOU WANT TO SEE MORE ABOUT THIS, there is a SLA Lab at the AMA in Chicago May 27-28 produced by ICN.

JOE AUER is president of International Computer Negotiations, Inc. (www.dobetterdeals.com), a Winter Park, Fla., consultancy that educates Professionals on IT Procurement, Sourcing, and Vendor Management. ICN sponsors CAUCUS: The Association of Technology Procurement Professionals. Contact him at joea@dobetterdeals.com.

A ‘Top-Down’ Look In Challenging Times

By Joe Auer

As the daily media drumbeat of “economic downturn” picks up volume, we’ll no doubt be challenged to optimize IT costs and value as we move into possibly tough financial times. So doing better deals and managing vendors better will become much more important for IT organizations this year.

Traditionally, most IT organizations view their technology deals from the bottom up. That is, they tend to have a project-oriented perspective rather than a big picture-oriented overview. While there’s nothing wrong with this approach – especially if it’s coupled with a disciplined procurement process – you may miss opportunities to leverage major negotiating power.

Of course, focusing on a specific deal is important and can add value to the organization. But if you pay attention to only one deal at a time in uncertain economic times, huge cost and risk issues may go unaddressed. It’s the age-old “not seeing the forest for the trees” thing.

If you have to cut costs significantly, you should look at IT spending from the top down, identifying each major spending area. An excellent way to do this is to look at your annual IT budget. The major budget categories – hardware, personnel, software, communications, services and the like – provide a high-level indication of where the big money is going.

Armed with this information, you may be able to find opportunities to cut significant costs and risks and maximize your vendor’s attention. Remember, technology vendors are also under financial pressure and need all the business they can get. They may be willing to cut you a break in order to keep your business.

An analysis of each spending category should include adding up what you spend globally with each of your largest suppliers. You may be shocked at how much bargaining power you have but aren’t using.

Then, review the existing contractual relationships with those suppliers since you may have contractual restrictions such as cancellation fees that have to be included in your analysis. When you’re done, you’ll find opportunities to consolidate spending, leverage your negotiating power, reduce costs and improve contract protections.

After the spending categories have been identified and totaled, they should be prioritized. There are many approaches to prioritization. A simple method involves rating each category according to four criteria: cost, complexity, risk and business need. You can weight each criteria using a 10-point scale to generate a numerical score that can be used to prioritize the opportunities. A 1 would be the lowest rating and a 10 the highest. A category with very high cost, complexity, risk and business need would rate four 10s for a total score of 40. Let’s look at each factor:

• Cost is obvious. Areas of significant spending should receive more attention than the nickel-and-dime stuff.

• Complexity is important because spending areas involving sophisticated, new or unproven technology, or complex business processes should receive scrutiny.

• Risk goes hand-in-hand with complexity because the higher the complexity, generally the greater the potential risk. But risk should be evaluated separately. A category with a low complexity rating could carry a high potential risk. In any event, and in every deal, have your suppliers at least be contractually accountable for nonperformance through clear warranties and sufficient remedies. That’s a great start.

• Business need establishes a relative value of importance of the category’s overall contribution to the business – and the bottom line.

With the categories having been identified, totaled, analyzed and prioritized, the real work can begin. Start with the categories that score the closest to 40 (highest priorities) and work your way down as far as time and reasonableness allow. Focusing on the highest priorities will ensure that your efforts are directed at achieving maximum benefit.

Developing the discipline to objectively scrutinize major spending categories and vendors creates opportunities that would otherwise go unnoticed.

A tough-times strategy to leverage purchasing power, reduce costs and maximize vendor performance goes a long way to answering an economic wake-up call.

 JOE AUER is president of International Computer Negotiations, Inc. (www.dobetterdeals.com), a Winter Park, Fla., consultancy that educates Professionals on IT Procurement, Sourcing, and Vendor Management. ICN sponsors CAUCUS: The Association of Technology Procurement Professionals. Contact him at joea@dobetterdeals.com.