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Real world tips for negociating with Microsoft
Anders Wester, SAM manager of Sweden's Volvo, says he got a pretty sweet deal on his latest Microsoft Enterprise Agreement that included 75,000 seats of Office 365 and Azure.
How?
There were two key aspects of his strategy, he told IBSMA earlier this week.
First, you have to have a plan B that you're prepared to implement. "Often when I talk to people here in Sweden at other companies, they have just one licensing plan and they tell Microsoft that it's this agreement or nothing," says Wester. "They say if the price is not decreased to X amount then we will not take it, but of course that will never happen because then they’d be out of Microsoft licenses."
Wester's plan was to have another viable track. "Our alternative was to decrease the Microsoft environment to the smallest one possible, a much smaller investment." Wester's willingness to go with the alternative plan, which also had executive backing, set the stage for serious negotiations.
The second key to his strategy was to have good cooperation among all the business functions, from executive buy-in to purchasing participation. "Everyone was eager to get the best possible agreement so there was no problem to set up more meetings, ask questions, and discuss issues in short and frequent status meetings so that everyone was up to date."
In addition, at his side in negotiations was a purchasing representative specializing in IT. "Some organizations don’t have a pure software purchaser; they just have someone from purchasing that helps out with negotiating," says Wester. Working as a team with separate roles of duty helped out during the negotiation a lot. This carefully orchestrated plan puts Volvo in a much better position to negotiate. "Of course Microsoft is willing to negotiate, absolutely, but it all matters how structured you are within your organization,” notes Wester.
To give Volvo an even greater license negotiation stance going forward, Wester recently reorganized his software asset management team assigning one person to be the IBM manager, one the SAP manager, one the Microsoft manager, and so on. "Usually you have one software asset manager as a generalist, but we’re focusing on developing experts in each area so that we can make better deals, have more control, and not spend money not needed for licensing. It’s all about control."
The nitty-gritty of Wester's strategy and how he and his team negotiated a great deal on its Microsoft Enterprise Agreement is the focus of his presentation at the SAM Summit London, Oct. 21-22.
To view the Summit's full agenda and to register to attend, visit SAMsummitLondon.com.
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