Software industry accused of playing hardball

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Aggressive sales techniques are still rife among software vendors, according to research by Ovum analysts.

Of 125 firms questioned, all said they had experienced forceful sales practices by vendors at least once.

“Many software companies claim that they have become customer-centric and that they have left the world of questionable sales tactics behind them. However, these often return when vendors are under sales pressure,” says David Mitchell, software practice leader with Ovum.

“The forceful sales practices often result in many firms being ‘persuaded’ to spend more than they want and sooner than they want.”

Two of the most popular methods identified by Ovum are the “Puppy Dog” approach and “gunmetal in the mouth” method.

In the first case, the vendor gives a user-organisation free software for a trial period, and starts charging for it after a period of time, once the user has built up its relationship with the vendor. This is similar to the tactics used by the unscrupulous end of the pet trade to encourage people to buy puppies. To counteract this tactic, Ovum advises users to define evaluation criteria for the success of the trial and any future purchasing arrangements before the trial actually begins.

“With the ‘Gunmetal in the mouth’ technique, the user organisation builds up a dependence on a software vendor in a number of mission-critical areas over a prolonged period of time – many years in most cases,” said Mitchell.

“Once renewal time is reached, a threat to remove the software may be issued by the vendor unless the user renews the contract which, normally, is commercially less attractive than before.”

Mike Lawrence, MD of software reseller Bentpenny, says Ovum is partly right, “The Puppy technique is not disliked by resellers or customers if it is done fairly, it’s the distributors that hate it because it cuts them out. If it is done fairly, you are given 30 days to evaluate the software and there is the proper uninstall software to remove it if you don’t want it. If the vendor is being aggressive it reduces the test time and provides flaky uninstall software – that is wrong.”

Meanwhile he agrees that the gunmetal approach is a real problem, “There are firms that tell you that they cannot help you with a bug you have discovered and that you have to buy an upgrade – that’s verging on the criminal. We have had it ourselves with accounts software. I have heard of a firm that makes a business out of taking over smaller software firms and then imposing this system as a way of making money out of existing customers – you have to watch out for it.”

Ovum advises the following steps for users, always have a commercial alternative if the software provided by a vendor has a mission-critical role. Be willing to call the vendor’s bluff. There are often significant loopholes in software contracts, such as ambiguity in the interpretation of key terms.

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