Licensing Negotiations - profiling the opposition

Before entering into any technology license negotiation, it's sensible to first develop a profile of the party you're negotiating with.   With IP negotiations, this can be done in a number of ways, but in this post we'll talk about how a party's role in the market can impact on their profile.

Here's a quick breakdown of how a party's market role can affect their negotiation stance:

Reports of the death of custom enterprise software have been somewhat exaggerated...

Many observers believe that with the advent of Software as a Service (SaaS), custom enterprise software may have had its day.   The demand for various models of cloud services has increased.   This model often comes hand in hand with a "best of breed" software selection approach which reduces the need for custom-made software solutions in the IT services industry.  But will the continuing trend towards this model mean the death knell for custom designed software?   It's not likely.   In fact, as we suggest below, there is a significant likelihood that a demand for customized enterprise solutions will continue.    This means that a good understanding of how to negotiate enterprise software contracts will be a necessary skill.

Living in the Cloud

Cloud services have proliferated the IT services industry in the last few years or so, and it's easy to see why.   There are numerous advantages to offering and using cloud services as opposed to out of the box software solutions.   For service vendors the model enables a steady income stream and a quick way to fix bugs and get improvements to customers.   For providers, it's a way of diversifying existing IT services and enabling income that wasn't previously available.   For service users, the model offers better tax deductibility due to the switch from CAPEX to OPEX, usually a better overall reliability, and if properly researched, it can reduce the overall IT maintenance spend.

Collaboration Conundrums

We know.   It's hard enough satisfying your own shareholders, let alone trying to satisfy someone else's. The thought of trying to get another enterprise to work with you on a long term development project involving multiple IP rights can be daunting.

But however difficult collaborations are, sometimes you can't afford to ignore the opportunities they present.  We can't give collaborations and collaboration licensing an exhaustive treatment in this post, but we thought we'd put pen to paper and give you a summary of some selected issues that need to be considered when putting together collaboration deals.

Value through Transactional Constructs

Now, finally we’ve arrived at the third category of ways to overcome the value problem.

Those of us who are waiting until the accounting profession develops an accurate measure for valuing IP could be waiting a while for the reasons we've already discussed.   The main issue is that it’s almost impossible to get value metrics that are truly accurate.
   

It could be that in looking for firm and unshakeable metrics, we’re barking up the wrong tree.