by Thomas Wailgum

ERP Software: How to Get Big Discounts Now

Dec 02, 20082 mins
Enterprise Applications

I sort of feel like a used-car salesman, but here goes: If there ever was a time to get a GREAT deal from an enterprise software vendor on ERP, CRM, supply chain and BI applications…NOW IS THE TIME!

“In both the enterprise and SMB space, recent market conditions point to a lack of available financing for enterprise software purchases,” writes Forrester Research’s star enterprise software analyst Ray Wang, in a recent blog. “This trend will continue as the credit markets tighten. The result: vendors will be more inclined to discount. Enterprises engaged in contact negotiation with software vendors should take this opportunity to seek additional discounts as the scarcity of new deals will put customers in the driver seat.”

What do you need to know to get those deep discounts and price concessions? Wang offers five negotiation tactics in the blog “Software Licensing and Pricing: Q4 Bodes Well for Discounts.”

Here are two from his list:

Push for Deeper Discounting. “Now’s the time to buy more licenses should you need them and if you have the cash to spare. Vendors remain anxious for new deals and new deals are far and few between. Apply lessons learned from the last economic downturn. Discounting will include non-license areas such as implementation, training and support. Push for maintenance fee decreases where possible.”

Don’t Hesitate to Wait Until January 2009. “Customers are now in the driver seat. Taking the time to push purchases off until January 2009 buys time for the implementation markets to slow down and provide enterprises with the best deal.”

To read the other three ideas, see Wang’s post.

Judging by the early comments to Wang’s tips, some companies have already received very favorable software deals. “I just got 90% off a large ERP deal at the end of Q3. Those guys were desperate and we knocked down maintenance two percent points,” writes Nikki A.

Venkat S. notes: “We threatened our vendor with pushing out the deal into 2009 and got a great response. They even offered financing. We couldn’t get them to cut maintenance but we may hold out as they announced a poor Q3.”

Remember, vendors are known for giving off-list discounts of up to 70 percent, according to a recent Accenture study. I have to believe that vendors might be thinking that “70 percent off” isn’t so bad at this point and time.