Clamping down on pirates, simplifying licences and boosting layoffs and outsourcing are among the recommendations that Accenture has for struggling software vendors.
The global consulting firm today released two reports that, while aimed at executives at software vendors, can offer insight to their customers, such as enterprise CIOs.
One is a high-level study of key global software indu stry trends, the other a more focused report on priorities for software vendors during this economic environment.
Pekka Huttunen, an Accenture senior executive in charge of its global software business, listed five strategies for software vendors:
1. Crack down on piracy One of Accenture's clients found it was losing $1 billion a year in licensing fees from customers who were out of compliance. "The opportunity is large," Huttunen said.
Of course, the piracy, he concedes, is often unintentional. "In general, licences are considered too complex from a customer perspective," he said. Vendors, meanwhile, rarely step up by providing customers with tools to help them better track their software usage. "They are partly to blame," he said.
The fix: "Make it a win-win" for vendor and customer, he said. Distribute free software tracking and auditing tools to customers. Simplify licences and reward end users, potentially with discounts, for using those tools and sharing usage information with the vendors.
"It's in the best interest of vendors to have CIOs like that," he said, pointing out that it shortens the negotiation time for customers to renew.
2. Trim expenses by cutting headcount According to Huttunen, "software firms are less aggressive on operational efficiency than other companies, historically. But in the new economy, there are opportunities for outsourcing your back-office or non-core processes."
This especially makes sense for the select group of companies that have in the last several years accelerated their pace of acquisitions: Oracle, Microsoft, IBM and others.
"They need to look again at the integration of their acquisitions and ask, 'have we integrated them well enough to be efficient?' " he said.