Software vendors' bullying revealed

Ovum has warned that unscrupulous software vendors are still playing dirty when the going gets tough for them

Aggressive sales techniques are still rife among software vendors, according to analyst Ovum, which warns customers must become more aware of vendors' tricks.

The analyst's report, based on interviews with 125 companies in Europe and North America, reveals the sales tactics most frequently used by vendors over the past year.

All 125 companies had experienced at least one "issue" with at least one of their vendors. Forceful sales practices often result in many organisations being "persuaded" to spend more than they want and sooner than they want, said Ovum's software practice leader David Mitchell.

He said in a statement: "Many software companies claim that they have become customer-centric and that they have left the world of questionable sales tactics behind them. However these often return when vendors are under sales pressure."

Two of the most popular methods discovered by Ovum include the "puppy dog" approach and "gunmetal in the mouth" method.

The puppy dog has the vendor giving a customer free software for a trial period, and then starting to charge for it, which Ovum said is similar to the tactics "used by the unscrupulous end of the pet trade to encourage people to buy puppies".

To counteract this tactic, the analyst suggests that users define purchasing arrangements and evaluation criteria for the success of the trial before the trial actually begins.

With the gunmetal in the mouth technique, the customer builds up a dependence on a software vendor in a number of mission critical areas over a prolonged period of time — many years in most cases — Mitchell said. He explained: "Once renewal time is reached, a threat to remove the software may be issued by the vendor unless the user renews the contract — which, normally, is commercially less attractive than before."

To prevent this, Ovum says customers should always have an alternative if the software provided by a vendor is vital to the operation of the business. Customers should also be willing to call the vendor's bluff. The analyst said: "There are often significant loopholes in software contracts, such as ambiguity in the interpretation of key terms."