Loathing\nEvery CIO who has ever dealt with a Fortune 500 software vendor has a story to tell.\u00a0 Software vendors provide poor support, use confusing license terms to later ambush their clients with software audits, charge for every enhancement \u2026 the list goes on and on.\u00a0 Customer surveys reveal deep dissatisfaction with software vendors.\nFor most customers, this is a way of life.\u00a0 Indeed, it has produced its own echo system.\u00a0 As I've noted before, a whole industry has grown up around managing software licenses.\u00a0 Entire conferences focus on how to read Microsoft licenses.\u00a0 Companies hire asset managers and consultants; law firms specialize in interpreting software licenses.\nFear\nBut no one wants to talk about these issues, at least in public.\u00a0 Consider this example from a story on Forbes.com, "Oracle plays hardball, so what else is new?"\u00a0 The piece quotes one CIO complaining that \u201cOracle and SAP are necessary evils.\u00a0 You can\u2019t not use them, but they are extremely painful to be in relationships with.\u201d\u00a0 The CIO is not named, however; the story notes that he or she \u201crequested anonymity.\u201d\nWhy?\u00a0 Because the most successful software firms are masters at high-pressure, bullying sales tactics.\u00a0 Take Oracle.\u00a0 The company specializes in trying to convince potential new customers that its license terms and model are harmless and easy to use.\u00a0\nOnce the customer licenses the product, however, Oracle takes a new tack.\u00a0 The company launches software audits and then argues that there are license restrictions it did not talk about during the sales process but that the customer has now breached.\nHow do Oracle and other vendors get away with these tactics?\u00a0 Path dependency.\u00a0 Software vendors know that once a large company has implemented an enterprise-wide or otherwise significant software tool it is hard to switch.\u00a0\nCompanies use software, after all, to run core business functions.\u00a0 Changing tools is expensive, disruptive \u2026 and risky.\u00a0 Vendors count on this reality to force their customers to choose between the lesser of two evils:\u00a0 pay the vendor some more rather than risking significant business disruption.\nBack in the driver\u2019s seat\nSome clearly feel that working with successful software vendors is a \u201cnecessary evil.\u201d\u00a0 If that\u2019s true, it\u2019s only because customers have ceded the playing field to their vendors.\u00a0 The fact is, customers are fully capable of regaining control.\u00a0 It won\u2019t be easy.\u00a0 But the return will far exceed the cost of vendor dominance.\nTaking control requires customers to take two fundamental steps.\n1. Determine switching costs\nNo customer will ever be in control of its purchases if it doesn\u2019t feel like it has an option to fire vendors who perform poorly or abuse the customer.\u00a0 Customers need to know, therefore, what it would take to replace a vendor.\u00a0 For example, changing database vendors requires a data migration project that has to be carefully managed by internal resources and that poses risks to ongoing operations.\nCustomers should not assume all the risk and work is on them.\u00a0 Competing vendors will be happy to support the switch.\u00a0 Before they make any proposals, however, they should understand the customer expects them to share equally in the risk of project failure.\u00a0\nPlanning a transition is hard work, of course.\u00a0 But the customer who finds it daunting should realize that the price of not assessing options is acceptance of continuing vendor poor performance and exorbitant pricing.\n2. Negotiate a better deal\nOnce a customer has determined that switching is a viable option, it\u2019s time to sit down with the incumbent vendor.\u00a0 Some customers may feel empowered after analyzing switching options to fire a bad vendor, especially since the vendor has left a trail of ill-will.\u00a0 But the problem isn\u2019t that the vendor is \u201cevil\u201d; instead, they are simply responding to pressures to generate revenue and an opportunity to maximize that revenue when customers don\u2019t push back.\u00a0\nWhen the customer changes the terms of the relationship, every vendor deserves at least one shot to prove that they are worthy of a constructive, long-term partnership.\u00a0 If they fail that test, then fire them.\u00a0 In my experience, however, most vendors change their behavior when given a chance \u2026 especially when they realize a customer is ready to switch if they don\u2019t.\nThe benefits of control\nA customer in control of its vendor relationships will reap immediate rewards.\u00a0 In a good customer-vendor relationship, the vendor is focused on:\n1. Problem solving: Investing in learning the customer\u2019s business drivers and needs.\n2. Value optimization: Delivering robust product functionality, excellent service and world-class price.\n3. Purposeful flexibility: Accepting fair and reasonable contract terms \u2013 even when they don\u2019t fit the vendor\u2019s sales model.\n4. Risk sharing: Agreeing\u00a0to terms that ensure risk sharing and accountability.\n5. Trust: Discussing difficult issues and putting \u201celephants\u201d on the table to the earn the customer\u2019s trust.\nThose are the only behavior worthy of the greatest software industry in the world.