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Previously on "A question for those with experience in procurement"

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  • jim2406
    replied
    All,

    Thanks for your advice, the general feedback seems to fit with my thinking.

    An annual negotiation has been agreed as the route forward with a suitable increase agreeable to both parties.

    Ta again.

    Leave a comment:


  • Captain Lockheed
    replied
    Originally posted by stillooking View Post
    as prev messages, s/w licences are a black art, things like Oracle t&c's are quite confusing to many people. RPI linking is quite common and can be up for negotiating depending on situation/client/supplr.
    Oracle's T's&C's would win a plain English award compared to SAP's

    Leave a comment:


  • Captain Lockheed
    replied
    Originally posted by jim2406 View Post
    Afternoon folks,

    Have any of you ever seen a software licence containing a caveat that licence costs will be adjusted annually to reflect inflation?

    Specifically, the situation this applies to a situation with:

    - Long contracts with fixed prices and terms (5 years +)
    - Enterprise software, with licences running into tens of thousands annually.

    In this situation, an inflationary adjustment seems like a sensible way to protect the vendor, but I'm not sure if it's the done thing.

    Thanks.
    very common, although I've never seen one linked to the RPI - it's generally just an arbitrary figure usually around 4-5%

    Leave a comment:


  • scooby
    replied
    Originally posted by jim2406 View Post
    Afternoon folks,

    Have any of you ever seen a software licence containing a caveat that licence costs will be adjusted annually to reflect inflation?

    Specifically, the situation this applies to a situation with:

    - Long contracts with fixed prices and terms (5 years +)
    - Enterprise software, with licences running into tens of thousands annually.

    In this situation, an inflationary adjustment seems like a sensible way to protect the vendor, but I'm not sure if it's the done thing.

    Thanks.
    I've just run a software procurement for £350k per year, 5yrs. We had inflation included in this @ 4%

    Leave a comment:


  • stillooking
    replied
    Originally posted by jim2406 View Post
    Afternoon folks,

    Have any of you ever seen a software licence containing a caveat that licence costs will be adjusted annually to reflect inflation?

    Specifically, the situation this applies to a situation with:

    - Long contracts with fixed prices and terms (5 years +)
    - Enterprise software, with licences running into tens of thousands annually.

    In this situation, an inflationary adjustment seems like a sensible way to protect the vendor, but I'm not sure if it's the done thing.

    Thanks.
    as prev messages, s/w licences are a black art, things like Oracle t&c's are quite confusing to many people. RPI linking is quite common and can be up for negotiating depending on situation/client/supplr.

    Leave a comment:


  • XLMonkey
    replied
    Software licence agreements are full of oddities, and the exact terms will vary depending on the negotiating skills of the customer, but my experience of them is that:

    - licence fee and maintenance costs tend to have fixed % increase (say, 5% increase per year). This isn't indexed (i.e. linked to changes in the inflation rate).
    - support fees, if they are separate from maintenance fees, tend to be indexed (usually to RPIX plus say, 2%).

    Leave a comment:


  • Hawkeye
    replied
    Increases are common. Majority of suppliers I have worked with put a 5-6% increase per year in their quote instead of inflation increases. This way we knew what we were going to pay in advance plus they were offering a large discount if we purchased 5 years of licences upfront. We did not encourage the 5-6% but that was the way they worked. You need to negotiate hard to get the exact terms you want.

    Leave a comment:


  • jim2406
    started a topic A question for those with experience in procurement

    A question for those with experience in procurement

    Afternoon folks,

    Have any of you ever seen a software licence containing a caveat that licence costs will be adjusted annually to reflect inflation?

    Specifically, the situation this applies to a situation with:

    - Long contracts with fixed prices and terms (5 years +)
    - Enterprise software, with licences running into tens of thousands annually.

    In this situation, an inflationary adjustment seems like a sensible way to protect the vendor, but I'm not sure if it's the done thing.

    Thanks.
    Last edited by jim2406; 21 September 2009, 15:46.

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