Software Licensing & Master Service Agreements : Chicago Software Licensing Lawyer & Attorney : Sam Conforti Law Firm : Master Service Agreements, Negotiations, Outsourcing : Cook County, Illinois

Well folks, I’m out of breath. I was minding my own business just cruising the net for interesting stories and then all of a sudden I stumbled upon a treasure trove of fundamental information. It all began when I came across an article by Michelle Megna entitled What’s Behind the iPhone Success Story? and read in the first sentence that Apple sold 3.8 million iPhones in the last quarter (that’s three months for the non-accountants) for a $1.5 billion boost to sales revenue during the worst recession we’ve had in approximately 70 years. I was interested to read Megna’s reporting of the reasons behind this success story – 1) the too numerous to list apps, 2) the interconnectivity with the Mac for ease of data transfer, 3) the consumer preference of the iPhone to the Netbook. You’ll have to read further down into the article before you come across the astounding sales numbers for RIM’s Blackberry devices for the comparable time period. And so the story ends – or so I thought.

So I’m in this smartphone / mobility state of mind when I come across Andrew Dod’s article entitled Strategic Considerations for “Going Mobile”. Dod’s article takes this topic into the stratosphere with countless references to vital information. He begins by calling our attention to the old days and another revolution, 1994 that is and modems firing at 14.4 bps. Companies quickly realized that the paradigm had shifted and they needed to be a part of the internet and figure out how to compete and make money.   With over 4 billion mobile devices in existence today the same questions asked in 1994 are being asked again:

·         How do we get our business on mobile?

·         How can we easily create and distribute content on mobile?

·         How do we integrate mobile into our business operations?

·         How do we ensure effective adoption of our mobile applications?

·         How do we extend and grow our business on mobile?

Dod cautions us that mobile is not just for marketing but can help the enterprise achieve its core business objectives. With the excess of mobile devices out there Dod declares that content should be upper most in the mind of the business strategist to address the“significant variations in operating systems, screen sizes, display resolution, processing speed, memory, and performance.” Dod lays out the three major types of content, each with its own unique character and requirements to fit into the business strategy:

·         Text messaging SMS (short message service) delivers simple content but is limited in how much it can deliver - only 160 characters.

·         Mobile Web (WAP): This is where your smartphone uses WAP (wireless application protocol) to access Web sites. The WAP browser is simplified for your handheld device but is fully interactive. Use of the WAP browser is different from a PC browser. Web sites usually display clumsily on the smaller mobile screens. It is better to deliver tailored offerings with a limited portion of the content and functionality available at the full Web site.

·         Mobile Applications: Since mobile devices support numerous platforms, rich media applications have become available enabling a much more vibrant user experience with video and audio. This allows for content developed specifically for the mobile device. Dod suggests that the smart business treats the mobile medium as its own medium, rather than an off-shoot of online.

Dod’s emphasis throughout his article is the importance of content when delivering it to a mobile device. He has devised a list of what he calls the ten C’s of mobile strategies. It is really quite ingenious. I could not do it justice in this blog posting and so I highly recommend his article to all my readers.

Continuing on with this treasure trove of information, many of my readers may remember my Blog posting last August 4, 2008 entitled Mobile Computing: A Unified Platform Is Essential As Technologies Converge regarding Jim Hemmer’s “Mobile Bang Theory”. Just to refresh your recollection Hemmer’s theory simply states that one action from a mobile device can be the catalyst for many other internal, as well as external, business reactions yielding significant ROI. Well Hemmer is back with a follow up to his Mobile Bang Theory entitled The Mobile Bang Theory – Part II: Let the ROI Sparks Fly. He sees the global economic meltdown as an aid in bringing cost containment more into focus for the enterprise and thus putting mobility projects on the top of the “to do” list for IT managers.

Hemmer’s take on the current mobile revolution is quite fascinating. He really sees a BIG PICTURE when he describes the inherent benefits of mobility. His vision combines multiple systems and devices and networks and processes and people and the end result is faster ROI. He emphasizes this faster ROI by explaining that the global recession provides opportunities in the sales cycle to impress your customers. He takes this lesson from the former president of Scandinavian Airlines, Jan Carlzon, who turned the company around during a deep recession. As Carlzon explained each customer interaction was a “moment of truth” for the company to impress the customer. Hemmer takes the moment of truth approach and refines it to fit today’s economic environment. These moments of truth become “Trigger Points” where the sale can be won or lost based on the timely and relevant use of data that can be brought to bear via mobile devices.

To be sure, mobility is not solely for the sales cycle. Hemmer’s article is full of other real examples of the use and benefits to the enterprise deploying the latest mobility devices and applications. He presents examples of mobility’s use for field service operations and also the productivity gains for IT Management itself as data can be retrieved real time to provide visibility into the operations. Jim Hemmer’s article is a nice companion piece to Andrew Dod’s article. And as Andrew Dod stated in his article:

“Mobile is here, now, and only going to dwarf the first Internet wave due to its ubiquity, essentialness, convenience, and proximity to nearly all we do.”

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Orla O’Sullivan reports for Network Computing in an article entitled, Obama Not Impeding Offshoring, TATA Says, that the campaign pledge to slow the flow of work to cheaper labor markets, either by directly employing people abroad or by engaging third-party service providers based outside of the U.S. has not occurred and in fact may be on the upswing. O’Sullivan discussed this matter with one of India’s leading providers of offshoring services, TATA Consultancy Services.

A large portion of TATA’s services are to the financial services industry, and this segment is growing with actual IT Operations taking place as banks and other financial services firms send more and more work offshore. O’Sullivan further reports that back in October of 2008 TATA purchased Citigroup Global Services Limited, Citi’s Indian offshoring services unit providing business process outsourcing. TATA’s next step is to sell its’ banking software products in the US.

As Raymond Strecker, global consulting practice head for TATA North America, describes this current spurt of growth:

“Our infrastructure business is growing the fastest. That is, inside the glass house, or data center: remote server administration, server repair, network monitoring, and various infrastructure services.”

It appears that as banks find the need to cut costs in this current global economic slowdown, that more regulations will just force these institutions to become more creative. If a bank or financial services firm finds it uncomfortable to have operations offshore, there doesn’t seem to be any prohibition from employing onshore service providers who do have operations offshore and thus indirectly reaping the benefits of cost savings.

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Last year, April 19, 2008, I posted an article entitled Is a Clickwrap Agreement Enforceable?. The article defined the terms and gave a general understanding of where we encounter these types of agreements. My editorial comment dealt with my “natural aversion” to the non-negotiability of such agreements. Based on the number of hits the article receives, it is easy to discern the interest in the topic and it seems appropriate at this time to augment the article with a “How To” approach. During the course of my research, a colleague of mine from my days at SAP, Patricia A. Dalki, discussed her views on the subject. Patricia has done the heavy lifting on researching the “How To” approach when drafting  such an agreement and has kindly shared her thoughts on the subject with me. Her research included an article by David L. Hayes of Fenwick & West LLP entitled, The Enforceability of Shrinkwrap License Agreements On-Line and Off-Line and she also cited an article I had included in my original posting mentioned above by Jason Haislmaier entitled, How Do I Build an Enforceable Online Agreement? – Not (Always) the Way SalesForce.com or Google Would.

With the kind permission of my friend and colleague, Patricia A. Dalki, here are some tips how to create an enforceable on-line agreement:

 1.  Record Evidence of User Acceptance

• Record evidence of user acceptance and the formation of each on-line agreement using a consistent, auditable process.
• By procedure – maintain evidence that the only way to access the service or product being offered is to scroll through terms and click “I accept” – user must have accepted.
• To the extent possible, keep records of time, date, and source of acceptance.

2.  Require Acceptance Before Delivery of Services or Payment

• Require acceptance before payment or delivery of the services.

3.  Make Rejection Clear and Simple

• Provide a clear, simple method for customers to reject the contract.
• Allow users to exit the process at any time.
• Do not require the customer to take additional steps or expend effort/money to reject the product or service.

4.  Make Assent Unambiguous

• Secure an affirmative, unambiguous manifestation of assent to the agreement from the customer.
• The more the customer has to do, the better.
• Examples include:

a.         Mouse click “I accept” or “I agree” button;
b.        Type “I agree” and submit (speed-bump for users, but more deliberate);
c.        “I accept” checkbox next to each provision, especially with an unusual or onerous provision; and
d.        Offer alternative “I don’t agree” option with an explanation that the user cannot use or access the product or service.

5.  Condition Use on Acceptance (covered in the introductory paragraph)

• Expressly state the user’s access to or use of the product or service is subject to these terms.
• Expressly state that you will not provide the product or service except pursuant to these terms.

6.  Provide Notice of All Terms

•  Draw attention to the on-line agreement.
•  Make sure the customer sees it, e.g. no “below the fold,” small print, or hidden text.
•  Place the “Accept” option at the end of all terms.
•  Require the user to scroll though all terms before making the acceptance action.
•  Consider requiring the user to check an “ I accept” box for each provision, especially for an unusual or onerous provision.
• No link to terms or scroll boxes
• Advise user to print and keep a copy of the agreement.

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If you read Mike Elgan’s article in InternetNews.com, Get Ready for Microsoft’s Big Comeback, you will see that the answer is yes. If the Tech Industry doesn’t have any bailout money foisted upon it, much unlike our banking industry, then this market will do what all markets do in a capitalistic system, i.e. only the strong will survive. That is really what an efficient marketplace does with its competitors. But enough about me griping about the impending fascist state of this administration and in particular the all powerful Timothy Geithner. Let’s get back to Microsoft. Read Elgan’s article. He foresees the impending shakeout in the Tech industry and recognizes that the weak players will fade away and some marginal players will be swallowed up by bigger players. He also takes note of the past miscues in Microsoft’s marketing, the ever unpopular VISTA operating system, and its’ much ballyhooed legal struggles.

Although he mentions it in the subtitle to his article, it takes Elgan a while to get to the pile of cash that Microsoft has been hording. So let’s deal with the 800 pound gorilla in the room first before we get to the nuances of Windows 7 and Microsoft’s plan to leverage it and reclaim its’ reputation and continue to dominate the marketplace. Cash is King. Microsoft has an estimated $20 billion in cash on hand just waiting to exploit a downturn in the market. As for survival and emerging as the dominate player after the current economic struggle, see paragraph one above regarding “only the strong will survive”. Elgan posits that Microsoft could buy Yahoo, Facebook, Twitter, and Hulu all in the same year. He doesn’t predict such a sweeping acquisition scheme, but he does recognize the coming consolidation in the industry and that the cash-rich enterprises will act in their best interests and flourish.

And now for the nuances to their reemergence, Elgan sees Windows 7 as the vehicle Microsoft will use to recapture the glory days of the pre-1990’s debacles. It is not so much a four-step approach; but rather Elgan sees four categories where Windows 7 will dominate:

1.       Netbooks: Mobile computing will kick into high gear. As Windows XP eventually will fade into the sunset, Windows 7 Operating System will be the operating system of choice and not the much beleaguered VISTA.

2.       Touch Screens: The transition from mouse, icon, and menu to the mouseless touch will be slow, but Windows 7 is poised to take advantage when the switch gets into high gear.

3.       Gaming: Growth in this sector will be exponential. Four categories to watch are i) console, ii) cell phones, iii) internet, and iv) desk top. Microsoft will dominate in 3 of the 4 categories, bowing only to Apple in the cell phone arena.

4.       64-bit Computing: Office 11 will ship next year in a 64 bit version and Windows 7 will provide the power boost needed for fast business computing.

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