There is a constant struggle between “lowest cost possible” and “simplicity of business model” that must be balanced between both ISV’s and CIO’s. Recently, I read a post on Computer Weekly titled “The Five Software Licensing Tricks CIO’s Hate” based on a Forrester report on unfair licensing practices.  The title suggests that ISV’s as a category are generally engaged in misleading tactics targeted at CIO’s, which runs contrary to my experiences with most ISV business models and sales strategies.  So, let’s try to look at this from a different angle as well.

With the exception of the very largest and most powerful ISV’s, very few have the ability to simply dictate terms and policies and most are legitimately looking for long term, win-win business arrangements.

It is understandable to want to align costs with value, but in many cases increased value is expected at the lower cost, which will ultimately impact the ISV’s competitiveness over time, and ironically come back to haunt those who are trying to manage costs.

What may be more important than determining which model is the best model, is the very ability to offer multiple consumption and usage models as a starting point.  The CIO/ISV relationship should ideally be a dialog, not a unilateral determination by either party, and in the most ideal situation a front ended dialog on those very facets of the relationship framework.

As an ISV, what are the most unreasonable demands you’ve heard from the C-suite?