Alban Schmutz, Chairman of CISPE, explains how the initiative has highlighted the issue of unfair license terms and united both buyers and vendors.
The launch of the Ten Principles for Fair Software Licensing in the cloud marks the start of a campaign which we hope will gain momentum across Europe and beyond. Working with Cigref to unite both buyers and vendors of enterprise software we have successfully highlighted the issue of unfair license terms and their pernicious impact on the growth of the cloud.
The launch was held under the patronage of French Minister for Digital, Cedric O, and attended by senior representatives from the French Assembly National (Madam Mirielle Clapot) and the European Parliament (Madam Stephanie Yon-Courtin) as well as leaders from some of France’s biggest organisations and leading cloud vendors. Delegates agreed on a number of key issues impacting the cloud and digital economy and recognised the value of the Ten Principles in seeking to address these.
First, it was clear to all who participated that we are at an inflection point in the development of the cloud and of the entire digital ecosystem. The cloud is far more than just another sector or aspect of the digital economy. It is one of the foundational elements without which progress will be stymied. Getting cloud right will open the doors to faster growth, more innovation and more jobs. But there is a real risk that legacy players, many of which have positions of great power in existing markets, capture these opportunities and restrict choice for their own benefits. Simon Besteman, Managing Director, Dutch Cloud Community summarised it neatly in our discussion: “The digitisation of the economy is the most important phenomenon for our economy. This evolution is facing ongoing obstacles that are artificially created by software providers eager to protect their position on the market and their revenue.”
“The digitisation of the economy is the most important phenomenon for our economy. This evolution is facing ongoing obstacles that are artificially created by software providers eager to protect their position on the market and their revenue.”
Simon Besteman, Managing Director, Dutch Cloud Community
Business software customers, including Cigref members are already seeing the efforts of certain software vendors to capitalise on the growth of the cloud as they create very strong synergies between deeply embedded legacy software, for example the productivity suites that many rely on for email, document management and databases, and their cloud offers. They use complex licence agreements and unfair pricing to ensure customers are directed away from competitive solutions. As Philippe Rouaud, Director of IT and Innovation at France Television, commented in his opening remarks; “It is not normal to charge a different price for the same software depending on the infrastructure chosen by the customer.” Yet this is precisely what some legacy software vendors are doing.
“It is not normal to charge a different price for the same software depending on the infrastructure chosen by the customer.”
Philippe Rouaud, Director of IT and Innovation at France Television
But the damage and risk are not restricted to increased costs. Innovation is irreparably damaged by these unfair licensing practices. It is hard to look beyond the solutions pushed by incumbent vendors when they enforce licenses that make it commercially or technically difficult to go beyond their proscribed software stack. New entrants with exciting applications and different approaches are denied access cloud markets tightly controlled by legacy players. Businesses miss out on innovations that could drive growth or enhance service levels.
Equally, internal innovation is also chilled. Not only do unfair licensing terms prevent access to platforms and services that could be used to develop new products, but licence costs can siphon off increasing proportions of free cash that could otherwise be invested in innovation. As Claude Rapoport, President of Belgian CIO organisation Beltug added “The main software providers operate globally and have the same practices across the different markets. Our members also complain about issues of software license management and commercial practices by providers.”
“The main software providers operate globally and have the same practices across the different markets. Our members also complain about issues of software license management and commercial practices by providers.”
Claude Rapoport, President of Beltug
The Principles for Fair Software Licensing in the cloud establish best practices that will prevent these distortions of the market and support a competitive and vibrant cloud marketplace. They are simple and non-controversial – a fact reinforced by the enthusiastic reception they have had from both users and many vendors. As Mirielle Clapot commented at the event; “This initiative is remarkable because it is supported at the same time by an association of cloud services users and an association of cloud service providers.”
“This initiative is remarkable because it is supported at the same time by an association of cloud services users and an association of cloud service providers.”
Mirielle Clapot, French Assembly National
As I remarked at the start of this post, I believe we’ve lit the fuse of something important to the future development and success of a fair and competitive cloud market. I have already had many comments and expressions of support form across the industry. And I’d love to hear from anyone interested in taking this initiative further. Further events are planned in Italy, Spain, Denmark and the Netherlands in the coming weeks. Please get in touch directly or use the ‘get Involved’ pages on www.fairsoftware.cloud to find out more.