Buyers warned about contract traps

15 December 2005
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15 December 2005 | Anusha Bradley

Pushy software sales techniques and contract traps are "rife" in the industry, according to a study.

Research firm Ovum quizzed 125 firms in Europe and North America about sales tactics they had experienced in the past year.

David Mitchell, software practice leader with Ovum, told SM: "All organisations we interviewed had experienced at least one issue with at least one of their vendors, be they large or small players."

Some used what they called the "gun metal in the mouth" tactic, when a vendor threatens to remove the licence for existing software, often used to carry out critical business operations, unless the contract is renewed.

Other practices also included what Ovum dubbed as the "crack cocaine" method - charging for free trial software once customers came to like it and therefore had a weaker negotiating position.

Ovum said buyers should define purchasing terms and trial evaluation criteria in advance and have an alternative supplier in mind.

"Buyers must be willing to call the vendor's bluff," said Mitchell.

Ovum wants to hear other problems buyers have encountered with software suppliers for a further report in March. E-mail vendor_issues@ovum.com

SMdec2005

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