It is common for vendors to ask prospects, customers, analysts and others to sign non-disclosure agreements (NDA). Without a signed NDA, vendors may be reluctant to share roadmap details, financial numbers and other sensitive information. Recently CMS Watch published a blog on why they have a policy of not signing NDAs with the vendors they evaluate, but what is the customer perspective? Should you as a buyer willingly sign any NDAs that vendors put on the table?
To quote former Gartner technology industry analyst Vinnie Mirchandani from his excellent blog from 2005 on Non-Disclosure, Non-Compete, Non-sense:
Why should they bind themselves with an NDA unless the information being shared is really sensitive -not shared with more than 1-2 people within the company or outside?
The problem with an NDA is that it is a legally binding confidentiality agreement that creates restrictions and can get you in trouble later. Talking about trouble: You will almost certainly get yourself in trouble if you sign an NDA without involving your legal department. Involving the colleagues in legal means added time and complexity, so in a procurement process, you don't want to have to go through this with too many vendors. To add to the fun: if the vendor is not based in the same country as your are, then you can expect the lawyers will take some additional time deciding the state of governing law and other legal details.
In reality, and with very few exceptions, almost no vendors keep track of what exactly was said at a given meeting. This means that it is extremely hard for any vendor to actually enforce an NDA in case a story leaks. Let's say you have an honest and open-mouthed employee like intranet manager Mark Morrell at BT who writes blog postings with titles like these:
Mark is doing a great job for the intranet community by openly sharing his perspective. Even though Mark is not sharing any trade secrets, some NDAs are so restrictive that blog postings like Marks would have to be approved by the vendor. The same goes for tweets, Facebook updates, LinkedIn status messages and group postings, etc.
I used to work at a US software company, where the rule-of-thumb as a European employee was that I should never sign anything at all. As a customer, I suggest applying the same principle to save time and avoid potential trouble down the road.
Note to buyers/customers: I'm not saying that you should not ask vendors to sign confidentiality agreements. I understand that your digital projects may be very sensitive and may require contractual arrangements in order to guard secrets. As always my advice here is: Remember that you are the customer and that you are the one paying the bills.
Note to vendors: We are not a traditional analyst firm, but also don't sign vendor NDAs. We will honour any news embargo for a couple of days, but we will not consider covering industry news unless we are allowed to talk to customers to get their perspective.
I've regularly covered annual reports, earnings announcements and other financial news about software vendors. These commentaries tend to stir debate and I am frequently asked why I bother to look behind the numbers. Is it really important?
