Software vendors are still employing aggressive methods to lock in sales, according to a new study by market analyst Ovum.
Ovum surveyed 125 organisations in North America and Europe, examining common sales techniques adopted by vendors. All end-users surveyed reported at least one “issue” with a vendor. They also noted that forceful sales pitches left them spending more money than they wanted to, and sooner, Ovum says.
Many software companies say they have reformed questionable sales tactics but the study found that vendors still employ them when under sales pressure, Ovum says. About a dozen large and small vendors were mentioned in the course of the survey but Ovum didn’t name them in the report “since no vendor came out darker than the rest”, says David Mitchell, Ovum’s software practice leader.Vendors primarily use two methods the survey found. In the “puppy dog” approach they offer software for a trial period and then charge later. To guard against this method, Ovum cautions organisations to define trial use periods and purchasing arrangements prior to using software.
Another method, nicknamed “gun metal in the mouth”, occurs when an organisation employs software in mission-critical areas for many years. The organisation may be offered software at a substantial discount initially, but when renewal time comes up the vendor may threaten to remove the software unless the user commits to a more expensive contract, Mitchell says.
To avoid this situation users can have a commercial alternative available for the function and be willing to call the vendor’s bluff. Mitchell says Ovum recommends that companies which spend more than 10–15% of their IT operating expenditure on one vendor should have a sourced replacement plan ready in case negotiations go bad.