Backbytes: How software companies are losing friends and alienating customers

Far from trying to hold on to their customers, big software companies seem to be trying to wring them even harder

When a once-comfortable company suddenly faces a new competitive threat, it can go one of two ways: either it can respond by getting better at meeting customer demands, by cutting inflated prices, for example; or, it can become even more aggressive in its pursuit of growth, whether apparent or real - ultimately driving away even more customers in the longer term.

Faced with a growing threat from cloud computing, it seems that software companies are generally choose the latter. Increasingly numbers of CIOs and other software buyers Computing has talked to are expressing their contempt for software vendors - especially when it comes to the dreaded software audit.

Rather than simply keeping valued customers (more or less) on the straight and narrow, CIOs claim that software vendors are using it as an opportunity to shake down their best customers.

One, for example, told Computing: "They've become harder to deal with, not easier. They all have fairly publicly stated aims to squeeze more money out of customers. If anything, I've found that as traditional software vendors are being forced to move to a cloud-based model, they are obviously trying to do that while trying to maximising every penny from their existing corporate customer base," they told us.

They continued: "We, like other customers, have found licensing audits much tougher in recent years and that's not because our behaviour has changed or because we have been flouting our licence conditions."

In addition, software vendors are sneaking in changes to their licences under the radar when software is upgraded. While the licence conditions for new software might go through legal, the licences related to upgrades are often waived through - giving software vendors an opportunity to slip in sneaky changes to their conditions.

"I've heard of companies not much bigger than ours that have done their utmost to stay within the terms of their software licences, but have still been hit with £1m bills," says our source, adding that when the same software vendors start to try and push their installed base to upgrade or migrate to their own, freshly developed cloud services, they shouldn't be surprised if they're told where to go.