Part of that process is the question of whether it is just a good `PR Stunt’. That is a perfectly appropriate tactic, of course, and poking a generally perceived weak point like contract terms can be a good target for such an approach. In practice, the change announced by CEO Greg Gianforte is more than that. But it would also be easy to over-emphasise its impact when that will vary depending upon the actual services provided.

 

With that in mind it seems that Right Now’s new contract is a Curate’s Egg – good in parts. Gianforte called it a revolution, which is taking things a little far. As an evolution however, it definitely has its place in pushing the service provision business into being business-like.

 

The core issues its sets out to address are important. It is certainly the case that some users are being over-charged, and at least incorrectly serviced. That is probably as much a function of the immaturity of the service-delivery industry’s business model as it is anything else. There is still a good deal of learning for the business as a whole to go through. So there is a something to be said for creating a model contract  - and it is possible to speculate on this move initiating the next obvious step, which is the industry descending into a round of `contract terms wars’.

 

But, more seriously, there are real questions that the Right Now contract addresses, though I am not sure it always produces the best answers – indeed, at least one of the targets cannot be addressed by contract terms alone. That is shelfware – paying for applications or services that are un-required but an integral, inescapable part of the package. Yes, shelfwareis an old problem of the software industry and yes it can still be part of the overall package of services now provided to users.

 

Part of the problem here is the whole service provision approach. For the first time, business people seem to have picked up on an IT development faster than the techies. But the industry producing the code that is now run as services is still largely geared to the old business model of the one-off sale of a licence to use – coupled to an annual maintenance fee where appropriate. That model almost demands giving the users everything they might need, even if there is no prospect of them actually ever needing it.

 

With a service-based model, however, it should be possible for users to select, at a far finer level of granularity, just the services they require. It is wrong that they should have to pay for `Mega-Corp Accounting Soup-to-Nuts’ when all that is required is `Noddy’s Bookkeeping’ plus a invoicing process.

 

But this will not be solved by contractural terms but rather by a serious rethink of both the way process services are delivered to users, and the role of the `IT department’ within the user community. The latter will ultimately have to get used to the idea of selecting individual business processes as appropriate service components – in other words learn keyhole surgery rather than amputation.

 

There is one aspect of the Right Now contract that does pose some direct questions, however. Having services provided at the same annual cost for three years, with the automatic option of an additional three years at the same price, may sound attractive. But I am not so sure it is. The pre-supposition has to be that this is the same fee for the same service level. But while the service required by the user may not change, and therefore no change is required to what is delivered, the cost of delivery will change. And history shows that it normally goes down as a direct product of Moore’s Law.

 

Certainly over six years it can be assumed to be at least surprising if the service provider doesn’t go through one major hardware upgrade. The normal result of these is that more powerful, faster systems are utilised; they will normally double the number of virtual servers available and deliver services to end users faster, or more reliably – or both. At the same time, energy consumption will tend downwards in absolute terms, and downwards significantly in per-virtual-server-per-second-utilised terms. To ensure that they are at the leading edge of service delivery technologies, service providers will almost certainly be upgrading much more regularly than every six years.

 

The result of this is that the cost of service delivery per customer will tend downwards, so the contract terms would seem to carry with them an implicit price hike. The other side of this is that there is obvious scope for service enhancement within the same price, but it would need to be carefully negotiated – not least because enhancing a service can sometimes bring unforeseen operational problems and, depending on the nature of the tasks being performed as part of the service, even run into compliance or governance issues. An enhancement that is just delivered by the service provider without consultation should be, I feel, a definite no-no. Users deserve the right to say: `I’ll stay the same and have it cheaper’, especially after three years.

 

The fact that the Right Now contract has an annual termination clause is good but further thought may mean it is not as helpful as it might be. After all, `I want out’ is always easier said than done. There will always be cost and inconvenience at the very minimum, and there may well be hidden issues. For example, while a user may have their data at the point of termination they will have lost all access to their business processes. This is unlike the traditional software purchase model where users still have the operational code – it may be unsupported, but if it works long enough to effect the port to another application that it good enough. So users may have to take out a contract with a new service provider before terminating the old – in effect having to pay twice.

 

Coupled with the fact that many delivered services are – and will continue to be – heavily proprietary in nature, many users may well see less in the ability of contract terms to stave off an effective lock in than they probably hope for.