Tech salespeople: Do you have a response ready when a customer insists on owning on-premise software/deliverables, but your contract offers “only” a license? Does that disconnect stall the talks until your Legal Department can engage case-by-case (if it even can/will) – or tank them altogether?
We offer talking points for own-vs-license sales pitches …
- Ask – what specific concerns does the customer have if the software is “only” licensed – nonexclusive rights – not owned by the customer?
- Consider – whatever those concerns, might the contract really address them already? If not, could it be revised to do so, without switching to customer ownership? At the same time, if your side is willing to give up ownership, how much more should it cost?
Customer concerns may include:
1. Permitted license scope is too narrow
But – what scope is the contract offering? What specifically about it doesn’t meet the customer’s needs?
If certain uses are not permitted in the contract as proposed by your side, could you broaden the license to allow them?
Assuming the customer isn’t (and won’t be) allowed to sell the software onward, why doesn’t a non-exclusive license do the trick?
2. Confidentiality of Customer Data
But – why can’t that be handled by confidentiality terms? Might such protections already be in the contract? If not, could you add them or sign an NDA?
Your Bottom-Line Market Realities: $
Where the customer still wants broader rights than you want to offer, consider reminding them that your proposed terms, and your side’s right to re-sell/re-use the software, are built into the pricing. Even if the vendor were willing to expand use rights (and it may not be), that will cost the customer more, either in payments or other concessions.
To Learn More:
Ideas about navigating this challenge are addressed in more detail in our Tech Contracts for Salespeople course (Lesson 3, “Software Rights”).
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