Software Portfolio Optimization
GTSG has its origins in 1988 as a team of systems programmers. While the firm has evolved significantly, mainframe has been mission-critical to the firm every day of our 33 years.
We serve a broad customer base which includes smaller shops (200 MIPS), midsized shops (up to 8-10,000 MIPS), and some of the largest shops in the world.
This broad experience combined with our relationships with Tier 1 providers (including two of the three highest ranked outsourcers for mainframe according to Gartner) keeps us at the forefront of developments in the mainframe software marketplace.
The current dynamic finds us engaged in a wave of competitive displacement activity driven largely by changes in pricing models following recent mergers. We also maintain connections with key software providers, including Micro Focus, Broadcom/CA Technologies, IBM, HCL Technologies (who have acquired some of the IBM portfolio), Rocket Software, BMC and BMC Compuware Software, GT Software and Stefanini.
How we help: the analysis
The Four-Step Process for Rationalization
Step One: Eliminate tools used by a small audience. The sheer size of the audience is not the only determinant of importance but it’s a start, and this is after all a cost reduction initiative. Survey all of the tools; quantify the audience size; assess the impact of possible elimination; propose alternatives if the impact cost trumps the tool cost.
Step Two: Replace a product with an existing feature. z/OS has numerous features now that might not have been available when you purchased a specific-function product. We exploit all of these inherent features in a cost-pressured environment. This involves training of the user audience – but the payback is often substantial. Politically, it’s hard for anyone to argue against using a robust feature for which you’re already paying. Performance monitors come to mind especially in decommission scenarios: a client can potentially replace a full suite of CPU-consuming products with a simpler and less intrusive RMF from IBM, which also carries a cost, but not like some other performance suites..
Step Three: Competitive displacement of a low use product. Picture an expensive product used by a small group within your organization. If you can’t do without the product (Step One) and can’t replace it with a built-in z/OS feature (Step Two), consider a competitive displacement where you swap Vendor A for Vendor B with locked in pricing for the term you feel is most appropriate for you. Then we do the complete analysis on the training and migration required.
Step Four: Competitive displacement of a high use product or a broader provider consolidation. When Steps One through Three do not work we need to consider this step. Admittedly, this is a tough sell to the audience of the product – but if the financials support the acquisition of the tool, the implementation of the tool, and the training required– this research is certainly warranted.
Further, when the marketplace tells us that providers are significantly escalating renewal rates, we owe it to our clients to try to get out in front of the contract cycle to create options for them. We have seen clients work for two years to migrate away from one suite to another. A nine-month contract negotiation works for the provider – not for our clients.
Framing the alternatives
In addition to listening to our clients and monitoring the practices of the providers, GTSG is constantly listening to the marketplace for mainframe announcements We utilize our relationships with Gartner, Forrester, and other industry analysts in support of this practice.
GTSG exercises our operational expertise and knowledge of IBM z pricing systems within the structure of a methodology provided by Gartner. One specific problem we are address is the lack of transparency in many agreements due to extensive bundling.
Our market intelligence also tells us that many clients don’t take advantage of cross brand allotments (CBA) or tailored fit pricing.
How we help: negotiation preparation and assistance
When engaged in negotiations, whether face to face with the provider or in negotiation prep, we execute within the structure of the Gartner’s five-step model depicted here: