Critical work in your organization is directly tied to the fate of your software vendors. So when PeopleSoft buys J.D. Edwards or Oracle attempts a hostile takeover of PeopleSoft, you are understandably nervous. Your nervousness usually does not stem from your love of PeopleSoft, J.D. Edwards or Oracle, but because the future of the software products you use everyday to run your business is now questionable at best and in jeopardy at worst. The potential buyers reassure you with promises of long term support and future product enhancements. But would you bet your own money on these promises?

Regardless of your vendor's current status, no software company is immune to the possibility of a merger, acquisition, or takeover. What can you do besides sit around and fret, ignore it, or just hope for the best? Plenty. Here are actions to take if your vendor is a target or even before your vendor becomes a target.

• Talk with your state attorney general's office to hear what efforts are underway to protect your investment. Express your opinion and gather information. Talk with other peer organizations to hear their perspectives. You may want to go as far as talking with the Department of Justice.

• Explore options for reducing dependency on your vendor for support such as:
  • Train in-house staff to provide the necessary support
  • Research outsourcing support options
  • Consider forming a support consortium with businesses like yours
    None of these options is a silver bullet; but it's better to have a game plan than to be strictly at the mercy of the vendors. These options involve work, management, and money but may provide long term protection at a lower level of risk.
    

• Review your contract to understand what legal protections you have and the terms and conditions under which you can invoke these protections such as escrowed source code or money-back guarantees.

• Investigate the potential buyer's software products. If you evaluated their products in the past, revisit their current product offerings. Talk to peers in companies using their products. Perhaps you will welcome the change based on what you learn or realize how critical it is to protect your investment.

• Conduct a risk assessment specific to your business and software situation. This is the most valuable action you can take. Develop mitigation strategies to use if any risk becomes a reality in the following areas:
  • Contractual terms and conditions, specifically any protections included or excluded from your contract.
  • Financial obligations, specifically related to a change of vendor ownership.
  • Technical infrastructure risks including the underlying products you are using such as database management systems, operating systems and middleware.
  • Software support risks such as vendor knowledge of the product and technical support skills.
  • Implementation and upgrade issues if you are in the process of installing or upgrading software products.
  • Conversion issues and costs if you are forced to convert either the application software itself or underlying infrastructure products.

Don't wait for a decision on an acquisition or merger to assess your situation. Take action now to assess your risks and develop mitigation strategies to protect your investment.