Gartner Research

Assess the Software Licensing Implications of Outsourcing

Published: 21 November 2008

ID: G00162452

Analyst(s): Richard T. Matlus, Frank DeSalvo


Software contracts often include restrictions that significantly increase the cost and complexity of outsourcing. Negotiate the restrictions and costs before finalizing deals with service providers.

Table Of Contents
  • Overview
  • The Readiness of Your Current Software Agreements
    • How to Proceed If Outsourcing Isn't Permitted
    • Next Steps If Outsourcing Is Permitted
  • Three Ways to Handle Licenses When Using a Service Provider
    • Retain Software Licenses
    • Assign Licenses to the Outsourcer
    • Use the Outsourcer's Licenses
  • Protections in the Service Provider Agreement
    • Payment for Expanded Use
    • Ongoing Maintenance and Support Fees for Licenses
    • Service Provider License Compliance
    • Offshore Outsourcing
    • Hardware-Based License Fees
    • Business Metric Fees
    • Replacement Software Alternatives
  • Negotiating Considerations
    • Negotiate for the Future
    • Manage the Order of Things
    • Negotiate the End at the Beginning

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