Don’t sign non-disclosure agreements with vendors

February 6th, 2010 by Janus Boye | , , | 1 Comment

Signature

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.

Read the post

Do you need a newsletter?

February 3rd, 2010 by Janus Boye | | 1 Comment

NewsletterThere is no question these days that every organisation needs to have website. But do all organisations also need a newsletter? While mobile technologies and social media may be talk of the town, newsletters do continue to deliver results for those organisations that deploy them wisely.

Today, e-mail newsletters have been around for 20+ years and some have become very focused, targeted and effective at using their newsletters to turn subscribers into new customers or strengthen their brand. Still, this recent tweet from Ian Truscott, VP WCM Strategy at Alterian caught my attention:

Just opened an e-mail - "Dear Client" - from a respected organisation. Go straight to trash, do not pass go, do not collect my attention.

In my view, this says much about how little progress we have made as an industry in terms of newsletters. Yes, I know that popular websites continue to crash under unusually heavy traffic, but a mistake like the above from a respected organisation just seems very out of place.

As with the rest of the Internet industry, most buyers start newsletter projects by looking at tools. As always, there is no shortage of these. You can look at tools as much as you like, perhaps the most important question is: do you really need a newsletter?

Instead of falling in love with tools, I urge you to start with the strategic questions: Who is your target audience and what are their needs? What are the measurable success criteria and how will you follow up on them? Who will own the newsletter internally?

I asked on Twitter if everybody needs a newsletter and received this intelligent response from IA and usability expert Eric Reiss:

As Tom Lehrer says, "If people cannot communicate, the very least they can do is shut up." So the answer is generally, "no".

What's your view? When should organisations consider newsletters?

Full disclosure: We use iContact to send our newsletters and for email marketing. We pay list price for the service and we don't do any consulting for vendors.

Read the post

A financial checklist for vendors

February 1st, 2010 by Janus Boye | | 9 Comments

As I have recently pointed out, the finances of your software vendor do matter.  Unfortunately, as an existing customer or potential buyer it can be quite difficult to look behind the numbers and find the relevant information. When it comes to financial numbers, many vendors are far from as open and transparent as they claim to be.

In an attempt to assist customers, I propose a challenge to all software vendors:

Publish the following numbers clearly on your website/blog:

1) Revenue and earnings (profit) and their growth over the last 3 years by:

  1. Total
  2. Licenses and product lines (% or absolute)
  3. Professional services  revenue (% or absolute)
  4. Support and Maintenance (% or absolute)

2) Ownership

  1. Who is the majority owner of the business (or is it public)?
  2. How long has the business been around and how long have the current owners owned it?
  3. How is the company's capital structured? I.e. is the business sufficiently funded?
  4. What finance has the company raised over the last 3 years?

3) Precautions in case of bankruptcy

  • Describe in narrative, e.g. use of escrow service or open sourcing old versions.

Some of this is already available in press releases and earnings announcements, but we hope vendors will help buyers by posting it in one place. We will then collect the links and create and maintain a free and publicly available spreadsheet with the financial information. We will do our best to convert currencies and take different methods and periods of accounting into account. This would enable buyers to use the data freely and engage in more informed conversations with their vendors.

In addition, we will rate the vendors giving them 1 point for each answer. With 9 questions, this means that even though the numbers might not all be satisfying, a truly open vendor will get 9 points.

The challenge is open to all software vendors, including open source and proprietary vendors. Here the ones we have written most extensively about, which I hope will participate: Day Software, Dynamicweb, Ektron, Episerver, eZ, FatWire, Google, IBM, Microsoft, SDL, Sitecore, Umbraco. I hope others will pitch in as well.

Thanks to Rory Bernard for suggesting this good idea and Kas Thomas for inspiration from his popular reality checklist for vendors.

Read the post

Why the finances of software vendors matter

January 24th, 2010 by Janus Boye | , , , , , , , , | 4 Comments

color_graphI'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?

Many vendors, in particular privately-held US-based ones, don't publicly release audited numbers. Instead they carefully select a few positive numbers to share via a press release. An example of this is seemingly successful CMS-vendor Ektron, which claims to be open and transparent, but will tell you only that their sales grew 38%. If you are willing to sign a non-disclosure agreement, they'll share more details on profitability, but can a vendor really claim to be transparent when you need to sign a contract to get some fundamental numbers about the financial health of the vendor?

In my view financial numbers and annual reports are a great way to gain insights about a vendor. These are the numbers you should indeed care about:

  • Services revenue. A good example of this is FatWire, where your local key account manager might have told you that they are very committed to their partners, when in fact services bring in about 30% of the company's total revenue.
  • New license sales. If this is down, it will tell you that the vendor is having difficulty signing up new customers. This can be a sign that an acquisition is lurking around the corner, which is what happened to Vignette as they got acquired by Open Text.
  • Maintenance and support revenue. If this makes up a large part of revenue, it means that the vendor has many customers who keep using the product. If you can get hold of a renewal percentage or average customer lifetime, it will tell you something about how long the customers stay with the product.
  • A break-down of revenue by product will tell you which products are really strategic to the vendor. IBM and Google are examples of big vendors, to who far from all products are equally important. This might reveal which products are likely to become discontinued. This happened with Microsoft CMS
  • Cash is king. Look at the cashflow to find out whether the vendor might be facing survival problems or is sitting on a pile of cash.

After looking at a few vendors, you'll discover that the accounting models tend to differ hugely. Some will list licence sales straight away, while others will break it down and only list it partially over a given period. Some might also divide their revenue between a corporate entity and different geographic regions, e.g. CMS vendor Sitecore. Details like this obviously make it difficult to compare the numbers.

Finally, I would say that the past decade has showed that positive financial numbers by no means guarantee that your favourite vendor will not be acquired or that your favourite product will not be discontinued. 2009 saw quite a few acquisitions, most notably Adobe's acquisition of  Omniture and Opentext which bought Vignette. I'm sure we will see more in 2010. These might not impact customers in the short-term, but down the road, they always also have significant impact, e.g. with closed regional offices, a new partner strategy or a cut in engineering spending.

Read the post

http://www.jboye.com/blogpost/migrating-to-a-new-intranet/

Migrating to a new intranet – how do you support the content owners?

January 22nd, 2010 by Dorthe Raakjær Jespersen
1 Comment| ,

At a recent meeting in one of our intranet community of practice groups we discussed what you can do to support your content owners when an intranet re-development project goes into to the labour-intensive stages of migrating content to the new platform.
The content owners may have many questions: Where does our content go in the …

Read the post

http://www.jboye.com/blogpost/open-source-what-does-it-mean-in-2010/

Open source: What does it mean in 2010?

January 10th, 2010 by Janus Boye
7 Comments| , , ,

Open source has been hailed as the obvious solution for saving money, being flexible, more transparent and avoiding project failures. After attending a recent open source event in London, I came away confused and it made me think about what open source actually means here in 2010. Source code access hardly seems either relevant or …

Read the post

http://www.jboye.com/blogpost/you-dont-need-a-great-intranet-to-be-a-great-place-to-work/

You don’t need a great intranet to be a great place to work

January 6th, 2010 by Janus Boye
7 Comments|

Earlier this week US-based usability guru Jakob Nielsen released his annual list of 10 Best Intranets of 2010. The list is usually used by intranet professionals around the world, including some of our members, to make the case for additional resources and intranet support from management. Is there any correlation between having an award-winning intranet …

Read the post

http://www.jboye.com/blogpost/open-source-doesnt-always-represent-best-value/

Open source doesn’t always represent best value

January 4th, 2010 by Janus Boye
13 Comments| , , , ,

Despite much hype we did not see a breakthrough for open source CMS last year. When I launched the discussion last year, we  received some great comments, e.g. on intellectual property and warranty, suggesting that in some cases open source is not the right decision.
In the past decade, several governments have issued statements with strong …

Read the post

http://www.jboye.com/blogpost/j-boye-online-in-2009/

J. Boye online in 2009

December 30th, 2009 by Janus Boye
No Comments| , , ,

Even though we are a significantly smaller organisation than most of our customers, we went through many of the same problems you’ve told us about throughout the years in 2009. We’ve gone through a not-fully-completed redesign, changed CMS, merged a few domains into one site, spent more time on content strategy and experimented with video, …

Read the post

http://www.jboye.com/blogpost/twitter-too-noisy-on-linkedin/

Twitter too noisy on LinkedIn

December 29th, 2009 by Janus Boye
4 Comments| ,

After LinkedIn announced Twitter integration in November, many LinkedIn users jumped straight in and connected their LinkedIn account to Twitter. Today many happily mix professional and personal tweets and broadcast it all onto LinkedIn – effectively reducing LinkedIn’s value and usefulness.
I’m a big fan of LinkedIn and liked it when status updates were added in …

Read the post