Having Problems Optimizing Your Software License Contracts?

No matter the size of your business, managing vendors and licenses is a complex task. Today, companies need multiple vendors, licenses, and providers for the changing markets. Therefore, it’s critical that your business starts to organize and develop new strategies to better facilitate your licenses and vendor management. Otherwise, you’ll have no idea of the different implication involved in each license agreement. 

According to Martin Prendergast, CEO and co-founder of Concorde Business and Technology, Intelligently Aligned, IBM and Oracle supply companies around the world with invaluable technology. However, these companies' licensing agreements aren’t easy to understand and are often complex. Many businesses' end user licensing teams aren’t knowledgeable or understand which products align with their existing technology. Therefore, it’s pertinent that all companies seek expert help so they can plan for their IT estate structure. This allows companies to better plan for the planned and unplanned software licensing changes.

Critical areas in a contract your company must pay close attention to and understand completely:

  1. Vendor Relationships – It’s very important to form close relationships with specific account managers. This will prove beneficial to your company when one of the vendors performs an audit on your material and license agreement. Normally companies such as Oracle, IBM and other vendors will use a third-party auditor. At times an auditor can find financially penalizing license problems that will cost your company thousands of dollars for back maintenance charges. However, if you form close relationships with each vendor they can work with you to reduce these charges.
  2. Product Substitution – Vendors understand the need to be flexible with their clients. Therefore, they offer you the ability to substitute certain products with another product of the same value. This helps companies to better plan and prepare for future business transformations. However, before substituting your products carefully read the subsection of your contract. This ensures the products you substitute are authorized by your vendor.
  3. Special Options – The vendor special agreement contract offers companies different license options. Vendors cater to company’s individual needs. However, it’s vital you have a complete understanding of what your vendor offers you. Afterwards, you won’t have unsuspected surprises and need to resolve ambiguous issues.
  4. Sub-Capacity Licenses – Vendors such as IBM won’t allow sub-capacity licensing in their contract. However, if a company request such changes the vendor must agree first. Therefore, if IBM has agreed to add a sub-capacity license clause in your contract, you must include the IBM License Metric Tool for IBM’s auditors.


It’s important that all companies understand their vendor licensing agreements. This saves your company time and money when an audit is preformed on your network. However, many companies don’t understand all the clauses and special request that a vendor can add to your contract. Therefore, it’s important to hire a company to maintain and oversee all your licensing agreements with the different vendors.

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Sarah Johnston

About Sarah Johnston

Sarah loves working on website design and teaching companies how to improve their SEO. Sarah has been working in the computer industry for the past 12 years.