Software reseller Corporate Software Inc has launched its Advance series of software management services worldwide – these are intended to reduce the costs of buying, installing and using both licensed and custom personal computer software. The Boston-based company has operations in the US, Canada, France, Germany and the Benelux countries as well as a wholly-owned UKP36m-a-year turnover subsidiary in the UK, International Software Ltd. Managing director of International Software, Richard North, says that, while the Brentford, Middlesex company generates 70% of its revenues from reselling software and providing support services to approximately 4,500 customers – or what he claims to be 20% of the UK corporate market – it earns the remaining 30% from negotiating favourable licence deals with software vendors on behalf of large organisations.
Maze
The group aims to provide customers with a path through the maze of vastly differing vendors’ licence agreements, and hopes to sell Advance on the back of this activity. The services are targeted at customers with 1,000 personal computers or more, multinational companies, or companies with a lot of branches, and are intended to provide such organisations with a better return on their investment by attacking the hidden costs of installation, support, and implementation of an ever-increasing number of upgrades. According to market researchers the Gartner Group, it costs a company an astonishing UKP19,500 or so to run a single personal computer over a five-year period. Some 56% of this goes on software, 12% on support, 14% on administrative tasks, such as upgrades, and the remaining 18% on operating the machine. North estimates, for example, that if a company has 2,000 personal computers and it takes an average of one and a half hours per year to upgrade software on each of them, then company-wide, this activity takes a total 3,000 hours. If each employee works an average of 1,100 hours every year, taking sick leave and holidays into consideration, it will take three employees, costing some UKP100,000 between them, to perform this task alone. But he reckons that a company using Advance would save 25% on buying and implementing a shrink-wrapped product itself.
It is very difficult to quantify the hidden costs of owning and operating a personal computer, but when you have thousands of the things, it is important to know. Corporate Software Inc has developed an approach to the problem designed to minimise the cost. Catherine Everett has been hearing about it.
Under the scheme, International Software purchases software for a particular company, negotiates and manages licence agreements with software vendors, then maintains, distributes, and installs the programs as required. Advance comprises five distinct components and a firm has the option either to mix and match certain elements or to use it as a complete package, thereby effectively outsourcing all of its software functions. The first service is licence management. Here, International Software negotiates contracts with software vendors and ensures that customers get a good price. It also keeps track of who is using what within a client organisation, checks that no unauthorised copies are in circulation, updates inventories, and writes reports for software audits. The second is maintenance – the group organises further deals with vendors to ensure that customers receive upgrades, updates and patches. According to North, the company ‘sits as a buffer’ between both parties. It’s aim is to simplify vendors’ programmes, so that a customer has to pay only one bill. Another ‘pressing problem’ is implementing upgrades at speed, especially, North says, because the ‘feature war’ has meant that most software versions now have a life of nine months at most. The third is specialised distribution this service is aimed at users of internally developed or customised software, and deals with logistical problems, such as getting hold of user manuals, disk duplication, specialised billing, and packaging.
Long-term answer
The fourth is electro
nic distribution – North considers this to be the long-term answer for supplying customers with software. International Software approves software requests from end-users on behalf of a client organisation, schedules and distributes it electronically to specified locations, and then tracks its use. The last is licence compliance – the company provides a baseline inventory of all software being used within an organisation. The inventory is compared with purchase records, and International Software ensures that the client company is not and will not infringe copyright regulations. North reckons that Advance provides customers with several benefits: it offers cost savings, ensuring that software is standardised and properly managed. It reduces a firm’s legal liablity, ensures a faster deployment of new technology, and provides a better service to end-users. Unfortunately, however, he could give no indication of an average contract value, saying that it depended on an individual company’s cost structure, and on how many services it required.
