Five lock-in traps to avoid when buying software

3. DON'T INVEST TOO FAR INTO ONE VENDOR'S STACK

The prevailing 'lock-in' technique of the major software vendors IBM, Microsoft and Oracle was to offer a vertical software stack with everything from the hardware to the application tied together and tuned for performance.

Oracle, for example, had achieved the final pieces of this stack after the acquisitions of Sun Microsystems and BEA. It could now offer organisations the ability to run an application built using Oracle's JDeveloper on the Oracle-owned BEA app server, which in turn is atop an Oracle database, running on Oracle-owned Sun hardware.

IBM, meanwhile, bought out Rational Software for the development of applications on a stack that includes the WebSphere App server, the DB2 database and AIX operating system. Microsoft does much the same using the integrated stack of Visual Studio development tools, the .NET web server, Microsoft SQL Server and the Windows 2008 server operating system.

Invest too far into the stack, and your ability as a buyer to negotiate became far more difficult if not impossible.

It was what IBRS analyst Joe Sweeney called the "art of creeping commitment."

Sweeney was putting the "final touches" on a study into the means by which software vendors "block out other vendors in the marketplace."

"You can start to become, for example, an all-Microsoft or all-IBM shop," he said.

While all the major enterprise software vendors used the tactic, Sweeney said that when organisations purchased Microsoft technologies in particular, "they don't realise they are paying for much more functionality than they are likely to use."

He believed Microsoft offered this additional functionality to start the organisation down the path of choosing Microsoft for their next project, without realising some of the costs they would have to face as a result.

"There are often cross-licensing ramifications when you use one tool that then impacts the other licenses within your organisation - which you need to upgrade," he said.

For example, Sweeney said he had one client who was interested in developing a business intelligence strategy, not realising that some of the required technology was already available via the SharePoint tool the organisation was otherwise using for collaboration.

"Once they spec'd out what they wanted, they realised that they only had Standard Microsoft Client Access Licenses, rather than Enterprise Licenses," he said. "They had to upgrade to Enterprise [licenses] to use the business intelligence tools effectively."

Microsoft's electronic forms suite InfoPath, as a further example, required an upgrade from the Ultimate license of Microsoft to the Enterprise license.

The tactic "increased an organisation's overall licensing costs incrementally," Sweeney said.

To counter Sweeney's argument, some would also argue that an integrated stack was worth the lock-in if it saved on maintenance and integration costs.

"Yes, you do get a lot of additional functionality going for a holistic vendor stack approach, and that is often cheaper than choosing the best of breed," Sweeney conceded.

But if a buyer was to have any flexibility or negotiating power in terms of software licensing, it was important to develop and maintain their environment such that these pieces remained distinct - ensuring that levels of the stack could be swapped in or out should they not be getting a good deal.

One mistake enterprise users often made was putting business logic (data) at the app server level - when all data should reside in the database. Lai recommended keeping separate the application stack and the data.

"It's basic IT discipline," he said.

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