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Meta Puts a Rule of Thumb on Enterprise Vendors' Sales Claims

Anyone who has been responsible for purchasing enterprise software doesn't need to be told that salespeople understate the costs for installing and customizing that software. Analyst firm Meta Group has come up with a rule-of-thumb multiplier for those claims.

"Our research shows the cost for installation and customization for enterprise software typically costs 2x-6x the price of the software license itself," Meta Group stated in a research note published this month.

"Salespeople can say anything over a cup of coffee," Meta Group analyst Dale Kutnick said in a statement. "Any promises the vendor makes regarding ease of installation should be written into the contract. If the vendor is not willing to do that, the promises should not be believed."

While some blame lies with the enterprise software vendor, not all of it does, according to Meta Group.

Users must understand that salespeople are motivated by commission structures, and consequently have an incentive to downplay the real cost of installing software, Meta Group writes.

Consequently, users should always budget for the entire cost of software up front, realizing that the licensing cost is only one-third to one-seventh of the total cost of the software, Meta Group finds.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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