SmartBuy: What's up?

he SmartBuy initiative, which was introduced last year with high expectations, seems to have fallen on hard times. The outlook is forlorn for any substantial savings from the program.

What happened to the $100 million in savings originally projected for fiscal 2003 and the numerous software enterprise licenses targeted for calendar year 2003? We're rushing through this year — we just got the fiscal 2004 spending bill — and still no SmartBuy contracts, no savings.

SmartBuy, on its surface, is tantalizingly simple: Use the government's buying power to secure "most-

favored customer" status and purchase commodity software at the lowest price. It promised software providers the opportunity to simplify their sales process and thereby reduce costs. Ultimately, differences in definition, motivation and objectives undermined the opportunities for both sides.

During early discussions about SmartBuy among government and industry officials, nobody seemed to hear or understand what anyone was saying.

Is enterprise licensing for commodity software an empty hope?

What do we mean by "enterprise licenses for commodity software"? The commodity software label is deceiving. "Common software" is a more accurate description for software that is widely used across government agencies. "Enterprise license" is a grand term, but it begs the questions: Which enterprise? And what do we mean by "license"?

There are two fairly common interpretations of enterprise licensing for software. It can mean the terms, conditions and pricing for software — think of General Services Administration's schedule contracts on steroids — or it can refer to a specific purchase of specific software for defined use within a defined enterprise. It is exchanging money for software usage rights.

Vendors' objective is to sell software. Government's goal is to minimize expenses during the life of the program, while managing software as a capital asset.

How do we make SmartBuy work? We have to agree on definitions, discuss objectives, respect varying goals and work for a win-win

resolution.

Software asset management will produce benefits exceeding price reductions, a factor not well recognized in the discussions. Industry wants to either increase revenues or decrease the time it takes to collect them. Conversely, agency officials say, "How can I pay you before the requirements are established and funded by the individual purchasers?" Industry responds: "How can I reduce my price when you're not buying anything?"

To achieve the savings and economy of scale, government must actually purchase something. Industry must in turn offer significant life cycle savings in an agreement that provides real and documented savings to agencies. An enterprise license can reduce costs and contribute to objectives for all participants.

GSA Federal Technology Service Administrator Sandra Bates is too pessimistic when she says the original savings may be difficult to achieve. It is still possible to save $100 million, even in this fiscal year. We just have to listen to one another and find a compromise that serves both communities.

Arnold is director of business development for PeopleSoft Inc.'s federal sector.

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above