R "Ray" Wang

Principal Analyst and Founder Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation… Read more

Behance Empowers The Creative Cloud To Make Ideas Happen

On December 20th, 2012, Silicon Valley based Adobe Systems announced the acquisition of Behance, a digital portfolio and community site for creative professionals.  Constellation sources estimate the purchase price north of $150M.  Founded in 2006, the SoHo, New York based company raised 6.5M in May 2012 from Union Square Ventures prior to the acquisition.  The acquisition expands two key areas for the Adobe Customer Experience set of offerings:

• 1. Empowers the creative class through connetivity. CEO and Founder of Behance, Scott Belsky noted that, “The creative industry has always been plagued with inefficiency and disorganization. But when we come together, we can use connectivity and transparency to our advantage. The prospect of using Adobe’s reach to connect the entire creative community is a once-in-a-lifetime chance to empower the creative world.”
  
  Point of View (POV): Behance is LinkedIn meets Pinterest for the creative class.  Since 2006, this people to people (P2P) driven creative community showcases and celebrates over 3 million projects and 30 million images.  A host of curated galleries, smartly designed iPhone apps, online store, and rich developer API power the community platform.  Among the design community, Behance is the dominant independent resource to showcase past projects.

• 2. Expands creative and design market leadership.  Adobe provides the creative tools for design through Creative Suite.  Behance focuses on discovery, inspiration, and collaboration.  Scott Belsky stated “If the tools we use to create are connected with how we showcase and discover creative work, we can help usher in a new era of idea exchange and collaborative creation.  It’s about time our tools integrated with the way we discover, inspire and collaborate. For too long, the creative world has struggled with a disconnected creative process. Creation should be inherently collaborative – and must evolve more frequently than typical software upgrade cycles.”
  
  (POV): At this point in time, Creative Cloud has not enabled public sharing between clients and teams.  Yet, Behance changes this approach and supports public sharing.  Users will expect Adobe to integrate Behance with Adobe’s Creative Cloud starting with easier content sharing from Creative Cloud and Adobe apps.  If Adobe successfully integrates the two products, customers will win as the synergies should lead to the empowerment and enablement of creative meritocracy.

The Bottom Line: Adobe Ups The Ante In The Battle For Customer Experience

Adobe, IBM, and Oracle are in a three way horse race to dominate the customer experience management space.  Today Behance acquisition widens Adobe’s lead in the creative tools and communities space.  As Adobe expands in the marketing and design side of customer experience equation, IBM and Oracle focus on the process automation, analytics, and traditional execution areas of marketing and commerce.  Fortunately for the vendors and unfortunately for most customers, one can not purchase a complete suite from within one vendor.  Hence, customers will be working with a patchwork of solutions in order to deliver end to end customer experience and digital marketing transformation for the foreseeable future.  Early adopters and fast followers will pave the way while cautious adopters will wait or vendors to acquire and integrate the suite.

Your POV.

How are you showcasing your creative portfolio?   Where do you look for design inspiration? Do you have an idea what tools are more effective than others?  Will you still stay with Behance post Adobe?  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your business strategy efforts.  Here’s how we can assist:

• Assessing social business/digital marketing readiness
• Considering a crowdsourcing and prediction markets strategy
• Developing your social business/digital marketing  strategy
• Designing a data to decisions strategy
• Create a new vision of the future of work
• Deliver a new customer experience and engagement strategy
• Crafting a new matrix commerce strategy

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Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Alumni: Constellation Research Constellation Research

Dr. Brent Kelly is a Vice President and Principal Analyst at Constellation Research and President of KelCor, Inc. He focuses on the unique intersection of unified communications, social business, cloud services, video and mobility.&nbsp; Dr. Kelly provides strategy and counsel to key clients including Chief Information Officers, Chief Technology Officers, investment analysts, venture capitalists, technology policy executives, sell-side firms and technology buyers. <br> Prior to joining Constellation, Dr. Kelly served for 10 years as a partner at Wainhouse Research where he was the primary author of most of the firm’s unified communications reports and forecasts. Dr. Kelly is a regular presenter at Enterprise Connect (formerly VoiceCon), the communications industry trade show where his… Read more

On February 4, 2013 Oracle announced that it was purchasing Bedford, MA based Acme Packet for $1.7 billion. Acme Packet will be a division within the Oracle Communications Global Business Unit. 80% of this unit’s revenues comes from the carrier business, 20% is in the enterprise space. With Oracle’s gigantic software footprint and the mega trends outlined above, Oracle has an opportunity to propel Acme Packet’s SBC sales into all areas of Oracle’s broad software business.

Initially, there was some surprise about this acquisition: why would Oracle, a software company, buy Acme Packet, a networking company? Constellation believes the acquisition is a highly strategic move on Oracle’s part that deserves some explaining.  This point of view is based on my own knowledge of the networking and communications space, and information from fellow analyst Ray Wang, who follows Oracle on the software side.  The acquisition is significant for a few reasons:

•  Oracle seeks to  improve  its communications middleware.  Acme Packet provides session delivery network solutions.  These solutions offer secure delivery of next-generation voice, data, and unified communications services and applications across IP networks.  The company has over 1900 customers across service providers and enterprises.

• Point of view (POV): While one doesn’t run across Oracle at all in the enterprise communications market, Oracle does have a strong carrier business built around OSS and BSS systems. In addition, the company has leading CRM, HCM, ERP, PoS, and other enterprise business software solutions.  Buying Acme Packet is a foundational part of Oracle’s consumerization of technology strategy. Acme Packet’s session border controller (SBC) products provide security for IP-based communications along with gateway capabilities that enable the different carriers’ implementation of IP- based voice protocols to interoperate with one another.

•  Acme Packet enables Oracle To address consumerization of technology for key industries. In many industries such as technology, healthcare, communications, and government, there is a need to prioritize message delivery.  For example, delivering a 911 call should have more priority than a download of a movie on a network.  In other cases, bring your own technology to work requires new techniques for successfully delivering voice and data.

•  POV: On the mobile device front, Voice over LTE (VoLTE) will soon become the standard way voice traffic is carried from mobile handsets. VoLTE is an all IP technology, eliminating reliance on the public switched telephone network (PSTN). Acme Packet’s SBCs are critical for security and routing of this kind of communications traffic.  In the broader communications space, reliance on the PSTN decreases almost daily. Wireline telephony companies are continually reporting fewer and fewer subscribers in nearly every country. As enterprise communications and consumer communications transition to all IP technology, SBCs are necessary.

An emerging development in the web browser space is the introduction of WebRTC in which the capability to communicate using voice and video will be native to the browser. This means that there will no longer need to be browser plugins (i.e. Google Hangouts) or third-party software (i.e. Skype) needed for voice and video over IP. One can imagine a world in which a billion browsers are instantly communications-enabled, on all types of devices including PCs, tablets, smartphones, and new form factors yet to be developed. Securing all of these IP communications streams and transcoding between the different communications protocols is where Acme Packet is the market leader.

Alumni: Constellation Research Constellation Research

Dr. Brent Kelly is a Vice President and Principal Analyst at Constellation Research and President of KelCor, Inc. He focuses on the unique intersection of unified communications, social business, cloud services, video and mobility.&nbsp; Dr. Kelly provides strategy and counsel to key clients including Chief Information Officers, Chief Technology Officers, investment analysts, venture capitalists, technology policy executives, sell-side firms and technology buyers. <br> Prior to joining Constellation, Dr. Kelly served for 10 years as a partner at Wainhouse Research where he was the primary author of most of the firm’s unified communications reports and forecasts. Dr. Kelly is a regular presenter at Enterprise Connect (formerly VoiceCon), the communications industry trade show where his… Read more

At the Avaya Evolutions event in Dallas (February 5/6, 2013) I had the opportunity to speak with Brett Shockley, Senior Vice President and General Manager, Avaya Applications and Emerging Technologies. The discussion focused around new technology Avaya is working on that will significantly impact and enhance contact center customer engagement: speech analytics and big data analytics. Both of these capabilities overlay two Avaya’s contact center products, Elite and the newer Avaya Aura Contact Center.  

The big data offering is based on grid computing in which hundreds or thousands of customer characteristics are kept resident in memory during a customer engagement session. In milliseconds, decisions about how to route a call are made based on the customer’s data. This data can include income level, product preferences, whether purchases are more likely to be made on a specific day of the week, where the customer lives, family size, etc. Decisions are made and then fed into the ACD which will route calls to contact center agents who are more successful at meeting the organization’s objectives with respect to that customer. In addition, the system can keep track of millions or billions of “events” that occur in the process of a customer engagement session, thus enabling additional analytics on huge amounts of data that otherwise would be discarded.

A second capability is speech analytics. Avaya has developed a speech analytics engine that can understand context as well as sentiment. Two examples were cited. In the first, contact center agents were given a new script to use with customers. For a variety of reasons, some of the agents resisted this new way to work with customers. The speech analytics engine was applied to the conversations. Whereas only 20% of the agents were diligently using the new script before analytics were applied, over 90% used it after the analytics engine was used because contact center management had an easy to tell not just that agents were using the right script, but they were also able to detect the sentiment with which the agent approached the customer.

In another example, a major broadcasting organization fed years of archived video footage into the speech analytics engine with the intent to make these video clips easily searchable using text phrases and tags. The accuracy of the tagging was surprisingly high, making it much easier to find a particular video clip.

As I listened to this explanation of big data and analytics, I recall one of my Constellation Research colleagues, Alan Lepofsky, suggesting that before organizations roll out social software or big data, they need to understand the “why”, meaning “why are they doing this”. Brett’s explanation of how big data will be used in the contact center and how it can impact outcomes was one of the most compelling approaches I've heard; it centered around this need for understanding the “why”. The way Avaya will sell big data and analytics to its customers will be to focus on the outcomes the CEO the chief customer experience officer want to have. Then, it will tune the analytics engine and the underlying contact center routing, operations, and rewards toward achieve those desired outcomes.

R "Ray" Wang

Principal Analyst and Founder Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled,&nbsp;Everybody Wants to Rule The World&nbsp;was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation… Read more

SAP Plans A Standard Support Maintenance Fees Hike Of 5.5%For New Customers

For new customers, SAP announced its intent to raise its standard support maintenance fee from 18% to 19% effective July 15, 2013.  The standard support option was reintroduced in January 14, 2010, after much pressure from user groups.  A few key takeaways:

• Price hike follows original plans. SAP has provided a six month advanced announcement to raise maintenance for new customers.  SAP has noted that “the adjustment does not apply to any existing maintenance contracts for SAP Standard Support closed before July 15, 2013″
  
  Point of View (POV): The announcement follows the original plan for existing customers to bring Standard Support in line with Enterprise Support by 2015 (see Figure 1).  SAP appears to be harmonizing the price increases for both existing and new customers.  While average support and service contracts are between 18 and 21% in the enterprise software world, SAP’s price increase will still keep it within the norm.

• SAP raises maintenance rates under the guise of quality. SAP claims that the maintenance fee hike is related to “maintaining the same high level of quality support in the future.  Key features include access to support packages, new releases of standard support solutions, enhancement packages, technology updates, ABAP source code for SAP software applications, and software change management.  SAP also requires customers to use Solution Manager.
  
  (POV): SAP’s tried hard to justify the price increase by offering message handling, remote services, SAP Solution Manager Enterprise Edition, and access to SAP Service Marketplace as additional value added benefits.   Unfortunately, most customers find Solution Manager to be a mile wide and an inch deep, the remote services to be minorly useful, and the SAP Service Marketplace to be immature at best.   The result – customers are not getting much value for the price increase. (Fellow Constellation Analyst Frank Scavo provides a list of four questions every new SAP customer should ask.)

Figure 1. SAP Enterprise Support and SAP Standards Support Schedule circa 2010

The Bottom Line: SAP Wants To Eliminate Standard Support And Competitors to Solution Manager

The 5.5% increase in maintenance pricing will continue a string of increases that will make standard support less compelling than enterprise support over time.  SAP’s harmonization of the standard support rate for new customers with the existing customer rate is part of a longer term process to eliminate the standard support cost savings that customers could take advantage.  What was once seen as an advantage of selecting SAP for a dual maintenance option, will no longer serve as a market differentiator.

More importantly, the continued anti-competitive assault by the Solution Manager product team on SAP Optimization providers and partners such as Hayes Technology, Intellicorp, Panaya, Revelation Software, and WestTrax does not bode well for customers.  SAP’s made it very difficult for cost effective and pro-customer vendors to exhibit and build functionality that’s competitive to Solution Manager.  The strong arm tactics could mean customers pay more for an inferior product.

On the bright side, third party maintenance options from Rimini Street and Spinnaker will provide some leverage for customers during their maintenance contract negotiations.  In fact, business at Rimini Street is growing and will probably gain more traction as a result of this announcement.

Your POV

What do you think about SAP’s maintenance hike? Is it fair? Is it in line? Need help with your contract negotiations?  Tap into the experience of thousands of contract negotiations.  Have a story to share about SAP contracts? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Other Useful Software Contract Negotiations Links

Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

Tuesday’s Tip: 3 Approaches To Return Shelfware

Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

Related Blogs, Press, and Links

MUST READ – 2010017 Irregular Enterprise – Dennis Howlett “SAP’s Maintenance Cost Sleight of Hand”

News Analysis: SAP Moves All Customers Onto More Expensive Enterprise Support

News Analysis: SAP and SUGEN Make Progress on Enterprise Support

20100115 SearchSAP.com/TechTarget – Courtney Bjorlin ” Choosing Standard or Enterprise support more difficult for SAP customers with no KPIs ”

20100114 IDC – Amy Konary at IDC “Guest Post: Back by Popular Demand, A Basic Maintenance Offering from SAP”

20100114 Forrester Blogs – Paul Hamerman “SAP’s Tiered Support Announcement Diffuses a Contentious Issue”

20100114 IDG News – Chris Kanaracus “SAP shakes up support structure, executive organization”

20100114 Enterprise System Spectator – Frank Scavo “Flash: SAP backs down on 22% maintenance fees”

20100114 Information Week – Doug Henschen “SAP Reintroduces Tiered Maintenance”

20100114 ComputerWorldUK – Mike Simons “Update: SAP does U-turn on Enterprise Support”

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

President, Computer Economics and Strativa, Inc. Computer Economics and Strativa, Inc.

Frank Scavo is skilled at formulating and communicating IT strategy, developing the business case for new systems, and facilitating the selection of enterprise systems, such as ERP, CRM, and supply chain management. He is also an expert in benchmarking IT spending and staffing levels for end-user IT organizations. Frank was one of the first tech bloggers, beginning in 2002 with his launch of the Enterprise System Spectator providing independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them. Frank has been quoted as an IT expert in numerous business and industry publications such as the New York Times, Wall Street Journal, Computerworld, CIO Magazine, ZDnet, eWeek,… Read more

Jarret Pazahanick alerted me to an email that went out this morning to SAP partners, announcing a unilateral price increase on standard support, for new maintenance contracts signed after July 15, 2013.

The email reads, in part,

To be able to provide the same level of support in the future, we will change the maintenance rate for new maintenance contracts with SAP Standard Support from 18% to 19%, effective July 15, 2013.

This moderate adjustment does not apply to any existing maintenance contracts for SAP Standard Support closed before July 15, 2013. We also want to be respectful about budgets being planned for 2013. Therefore, we encourage you to take advantage of the opportunity to place purchase orders with SAP Standard Support ahead of this change at the existing 18% rate until July 14, 2013.

I would point out that this is not a 1% increase in maintenance fees: it is a 5.5% increase (1/18 = 5.5%).

If I were an SAP customer, I would have four questions for SAP:

1. What improvements in SAP support will SAP deliver to justify this 5.5% price increase? Can we expect our internal costs to drop by at least 5.5% as a result of SAP's improvements in its support program?

2. What is the gross margin on SAP's maintenance business today, and how will that change after this increase is in effect? Maintenance is the most profitable segment in SAP's financial performance. Why should it become even more profitable? 

3. How have SAP's cost of support increased to justify this increase in my maintenance fees? Normally the cost to support mature products decreases over time, as issues with the program code are resolved. Offshoring of application support and deflection of support activities to SAP's user and partner network also have introduced support efficiencies. Shouldn't SAP be considering a reduction in maintenance fees rather than an increase?

4. Since SAP uses some of its maintenance revenue to fund development of new products as well as make acquisitions, will SAP provide these new products to customers at no charge? It seems SAP charges customers for new products twice: once, when it charges maintenance fees, and again when existing customers buy those new products. 

Several years ago, SAP customers fought back SAP's attempts to impose a maintenance fee increase by forcing all customers to move from standard support (at 18%) to enterprise support (at 22%). After a great deal of public outcry, SAP backed down.  Now SAP appears to be trying to impose a smaller price increase, with no apparent improvement in service, in hopes customers will not notice.

The only good news in this announcement is for providers of SAP third-party maintenance, such as Rimini Street.

Update: Chris Kanaracus at IDG News Service reports on the SAP maintenance fee hike. Larry Dignan at ZDnet also chimes in. Ray Wang provides more background and analysis.

Update, Feb 5: Dennis Howlett has a deeper dive, and he gets clarification from SAP on several issues. 

Related Posts

SAP backs down on 22% maintenance fees
Mad as hell: backlash brewing against SAP maintenance fee hike

Gavin Heaton

Founder Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of &nbsp;award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. Read more

1. Naming: The naming of your new brand can be fraught – but should be fun. Coming up with a name that is descriptive enough for your customers but imaginative enough to draw them in can take far longer than you can imagine. Then once you have a name, securing and registering it can take time and more than a little money. There are some agencies dedicated to naming, and if you have a big budget it would be fabulous to work with them … but if you’re running a startup, chances are you’ll be doing the naming over a few beers with your mates. Be sure to think through the various combinations of the name and how it will be used. After all, you don’t want to follow the example of promo pen company Pen Island.
2. Planning: No surprise here – but I get quite a kick out of the planning process. From building out the communications architecture through to building out the business case, planning is an important step for any startup. You’ll be amazed what you can learn in a couple of days – and the research and analysis (not to mention the discipline) will hold you in good stead as you start to seek funding and build your core team.
3. Visual design: Most people think that branding is about logos. A logo is just part of the branding process … but it does need to be given time and attention. And budget always helps. Even if you have budget, it still helps greatly to provide a solid brief to your designer – which is where your planning will help. Make sure you share your research and thinking – explain the various use cases and audiences that your new business will impact. Provide a list of “attributes” that describe your brand. Be clear about the vision you have for the future of your brand. All this information should soak into the appearance of your logo and the visual design of your band.

Now that you have a name, some understanding of the potential of your business and some ideas for your logo, take that list of attributes and find them in the list in this infographic from MuseDesign. Pay special attention to other logos that you see and that you admire. Think about how they are using colour to engage you emotionally. What can you learn from great logos? Which designs make your heart jump?

After all, if you want your brand to be memorable, you’ll need all the branding help you can get.

President, Computer Economics and Strativa, Inc. Computer Economics and Strativa, Inc.

Frank Scavo is skilled at formulating and communicating IT strategy, developing the business case for new systems, and facilitating the selection of enterprise systems, such as ERP, CRM, and supply chain management. He is also an expert in benchmarking IT spending and staffing levels for end-user IT organizations. Frank was one of the first tech bloggers, beginning in 2002 with his launch of the Enterprise System Spectator providing independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them. Frank has been quoted as an IT expert in numerous business and industry publications such as the New York Times, Wall Street Journal, Computerworld, CIO Magazine, ZDnet, eWeek,… Read more

Credit: Ryan O'Connell

For implementation and ongoing support, most customers rely on their original vendors of major enterprise applications, such as ERP, CRM, and supply chain management (SCM). But what happens when the vendor is not up to the job? What steps can buyers take to mitigate the risk of vendor support failure and protect their investment?

These are questions that come to mind when reading about a recent lawsuit by a governmental agency in Puerto Rico against Infor, alleging that Infor "has been absolutely incapable of resolving serious problems" with the agency's implementation of an Infor product.

The Allegations

The agency, known the Municipal Revenue Collection Center (or, CRIM by its Spanish acronym) originally purchased a license for a computerized tax management system in 2006, prior to Infor acquiring its developer, Hansen, in 2007. Complicating matters, CRIM originally purchased its Hansen license through a Hansen partner, Rock Solid.

Reading the agency's lawsuit, CRIM appears to have done at least a partial implementation of Hansen starting in 2006. Then in 2009, CRIM negotiated and executed contracts with Infor totaling approximately $1.1M to provide services and support for its Hansen system.
Sometime after signing these agreements with Infor, things appear to have broken down.

The details of CRIM's complaint against Infor are summarized by Chris Kanaracus at IDG News Service. In summary, CRIM alleges that the original resources Hansen assigned to the project left Infor after the acquisition, and that Infor was unable to provide other resources that were up to the task. As a result, CRIM claims it has had to create patches and workarounds to keep the system active and working, a job which is made more difficult by not having access to Hansen source code. According to CRIM, serious problems remain unresolved.

Take Steps to Mitigate Risk

Although any legal complaint will, by definition, be one-sided, there are important lessons that buyers can learn, regardless of the outcome of this legal action. In fact, lawsuits of this type are often settled without disclosing the details, meaning we may never know who is at fault.

Therefore, it is more important to focus on what buyers can do, before entering into a vendor relationship, to mitigate the risk of getting into a situation similar to what CRIM claims. 

1. Implementation success is ultimately the buyer's responsibility. By all means, reach out to the vendor, or a vendor's partner, for implementation and ongoing support. But recognize that you cannot delegate success. Ultimately, it is your implementation, and your responsibility to ensure you have support. 
    
2. Every mission-critical system implementation plan needs a risk mitigation plan. It appears that CRIM's system was core to the agency's mission--to "collect, receive, and distribute public funds corresponding to municipalities." Inasmuch as its Hansen system supported that mission, the system is, by definition, mission-critical. Did CRIM have a risk mitigation plan? Did that plan identify the risk of losing key vendor support personnel? Apparently, not.
    
3. Software product change of ownership introduces risk. Your risk mitigation plan should include a scenario where your software product changes ownership. In some cases, support actually improves under new ownership, especially if the new owner views the acquisition as strategic and the previous owner did not have the resources to deliver required levels of support. But in other cases, the vendor may be viewing the acquisition as simply an asset purchase and may be looking to drive support costs out of the business to improve profitability. Either way, a customer should pay close attention whenever a software product changes hands, and certainly before making new investments in that software, whether in purchasing additional licenses, or as in this case, in negotiating new service contracts.
    
4. Avoid single point of support failure.  It is important for customers to always have alternative sources for support. The vendor does not need to be the only source. Sometimes local partners are a better source. Other times, third-party support may be available from organizations that are not vendor partners. Even individual consultants, if they have the right skills and experience, can be a good source, and an excellent value. A combination of vendor support and support from other sources can often be the best approach, to minimize risk and ensure continuity of service.  
    
5. Secure access to source code. Finally, customers should negotiate access to source code as part of their initial license agreement, to allow the customer to take over its own support. If the vendor does not accommodate this need, then it often can be negotiated as a condition of a change in control, such as a buyout or acquisition of the vendor. In cases where the vendor goes out of business, a software escrow agreement can at least deliver original source code to the customer.

Commercial software is an attractive alternative to in-house custom system development, in part, because it relieves the customer of the need to provide its own ongoing support. Most of the time, vendors deliver their end of the arrangement. But customers should plan for the times when they don't.

Related Posts

Twenty Years of ERP Lessons Learned
SAP botching up support transition for Business Objects
Infor's opportunity: value in maintenance and support
Oracle applications customers: wedded bliss or battered wives?

Gavin Heaton

Founder Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of &nbsp;award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. Read more

John Willshire and Mark Earls make you think. They chisel and shape ideas until they are sharp enough to be carved into your mind.

As part of the Wharton Future of Advertising program, they put together this presentation that provokes a conversation around advertising and what it might look like in the year ahead. Take a look through, it’s quick and it will challenge you. Then read on below …

One of the things that caught my attention was a simple statement. “Make things people want [is greater than] Make people want things”.

This seems to be self-evident, but in practice it requires an alternative way of thinking. Almost all of our marketing theory and practice centres on the stimulation of desire. We deliberately create items, objects and experiences that are limited in their availability and then we amplify not only the fact of existence, but the fact of their scarcity.

And yet, we live in an age of abundance. We all know it. Yet we still play out this game of scarcity. I find it interesting. I find it fascinating that we are complicit in this form of cultural production that we call advertising. But I also predict a seachange ahead.

We are going to have to work a whole lot harder to generate the kind of engagement and interest that advertising once commanded. Our connected consumers have outflanked, outranked and even out-performed us. Mark and John are right. We will need marketing and advertising that is bolder than we have been in decades. And decidedly more primal. We’ll need to relinquish the calculator and the paperclip and step out from behind the mirrored glass and meet our customers face to face.

Big data may hold the answers – but we’re far from understanding the most basic of questions. Mark and John have lit a signal fire but it’s not off in the distance. Look down, it’s right under our arses.