Open source software offers an even more obvious route to lower software costs. Hemmady, who uses a significant amount of open source software, feels it works best for organizations that already have a decent-size IT staff and for open source applications that have attained a certain critical mass. "With critical mass comes a great degree of contribution from the open source community that results in a less buggy and far … richer feature set," he says. "And the nice thing is not having any surprises from vendors that change their licensing to effectively raise costs."
7. Recruit the Right Negotiators
Perhaps the best buying advice of all is to know your limitations. IT managers aren't necessarily good negotiators, nor do they always have an intimate understanding of all the business units being served. "Many companies have actual individuals in the purchasing department that are trained contract negotiators," Linchpin's Pavlyak says. "You'll be a lot better off having them negotiate the deals."
Cebula says that, at Kennametal, IT never negotiates its own purchases. "The business units help define requirements; IT provides technical information and specs. IT and purchasing choose the vendor together, and then purchasing conducts the negotiations."
You might also consider hiring a consultant to negotiate for you. Miro Consulting in one such company specializing in helping Oracle clients structure and restructure Oracle contracts to drive down costs, a particularly useful service for software with complex licensing. "It's like hiring an accountant to do your taxes," says Miro CEO Scott Rosenberg. "You do this once a year. We live and breathe this stuff." Linchpin's Pavlyak advises, however, to beware of consulting companies that are aligned more with the vendor than the customer.
In the end, getting the best deal is not that different from other IT functions. It's all about gathering the right information, doing the right planning and preparation, cultivating the right relationships, and using the right people for the job. It's also about not being afraid to ask for what you want, no matter how unlikely it might seem at the time. Whether you're renewing a 1,000-seat license or buying a handful of low-end servers, a few simple strategies can reap significant savings -- and help you avoid those land-mine deals that are too good to be true.