That's really no different than some of the wheeling and dealing that's long been the norm among the bigger companies that go to great lengths to win a competitive bid, I suppose. But by and large, big software companies have had the upper hand when it comes to licensing terms, software prices, and other parameters of what used to be multimillion-dollar, multiyear deals (or big honking deals, as one of my colleagues around here would say).
But the game has changed. Customers are demanding--and getting--lower prices, shorter licensing terms, renegotiated contracts, and better support. Indeed, the economic downturn and tighter IT spending have shifted the balance of power away from the software vendors and into the hands of the buyers. More important, this shift will likely be as near to permanent as things get in this industry. In the words of one CIO in our cover story (p. 22), "Gone are the days when we throw your software out there, and we know it sucks, you know it sucks, and the support stinks. We won't tolerate that." 'Nuff said.
In this week's issue, we also bring to your attention another power shift--in IT compensation. Gone are the days when marginally skilled employees could demand lucrative salaries and perks. It's also difficult for highly skilled workers to get even modest increases. Employers are holding the line, freezing salaries, trimming paychecks, cutting stock options, and more. With the economy being what it is, that might not be surprising. What's significant is the fact that this is the first decline in total compensation in the five years we've been tracking salaries and likely the first in a decade. For more on our survey of more than 10,000 IT professionals, see "Big Bucks Dry Up".