The Top 10 Mistakes Technology Companies Make

In working closely with abouttechinfo providers over the years, I regularly discover that these companies are making common mistakes that devalue the company, leave revenue on the table, or jeopardize their long-term health. So this special article identifies the top 10 of these mistakes to help you avoid making them.

10. Failure to register a federal copyright for company-developed software

Your company has spent months, and maybe years developing the next-big-thing. You’re out there licensing it to customers, fighting off competitors, and trying to maximize your revenues. What would you do if a customer was misusing your software? What if a competitor was copying parts of it to use in its product? There are various ways to respond to these problems, but one of the easiest to way to strengthen your claims is to register a copyright for the software with the United States Copyright Office. Registration provides you with an enhanced ability to have a court prevent infringing use of your software, and a greater amount of damages that are recoverable. The best part is that registration is relatively easy and inexpensive.

9. Licensing technology too broadly

So you’ve landed that big deal with that big customer. You’ve carefully priced the deal based upon your expectations of how the customer is going to use your technology – by a specific group within the customer’s large organization. You’re hoping that the success of this deal will lead to a greater adoption of your technology within the rest of the company, and ultimately more revenue for you. Unfortunately, you later learn that this one group is sharing your technology throughout the rest of the company, with no additional license fees to you, and there’s nothing you can do about it. Why? By failing to carefully and narrowly draw up the license grant in your agreement, you’ve unwittingly granted the entire company the rights to use your technology, and you’ve left a pile of cash on the table.

8. Failure to provide detailed support and maintenance policies

Too often, once a company’s technology is ready to be licensed, determining how to support the technology becomes an afterthought. General and non-descriptive obligations like “providing telephone and email support” and “providing updates” are invitations for disagreements and missed expectations. When is phone support being offered? How quickly will you respond to problems? What is considered and update and what is a new product for which you would charge the customer separately? Many times, you need your customer to provide you with certain information about the problem before you can diagnose and fix it. Set the appropriate expectations in your support and maintenance policies and avoid these issues in the future.

7. Not contracting customers to recurring support fees

Customers want and expect that you will be there to support your product, assist with problems, and provide them updates when you add features or fix bugs. Customers also expect that you will regularly charge them for these services, so why do so many technology vendors sell a product to a customer and fail to structure regular and recurring support fees? In general, a technology vendor’s highest profit margins are realized through a support fee stream, and not in the upfront license charge.

Leave a Reply

Your email address will not be published. Required fields are marked *