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Software Vendor Consolidation by Axia Consultants
What to do if another vendor acquires your software vendor

Company acquisitions, takeovers, consolidations and failures happen in every business sector, including the business software sector. And, with the present economic climate, combined with a shift to cloud based technology – this may well happen more frequently in future, especially for those vendors with dated technology. So what do you, as the customer of a software vendor, do about it? How can you minimise the potential disruption to your organisation, or indeed even take advantage of it?

Safeguards you can put in place now:

1. Obtain software Escrow with a third party, such that should the software vendor go bust, you will have access to the source code. This is always assuming your organisation has the technical resources to manage and program the code.

2. Get to know other software customers. Join the software user-group, attend networking events and build up contacts with other customers. There is safety in numbers and should there ever be problems, you can act jointly – always more effective than on your own!

3. Prepare a ‘strategic plan’ of what to do in case such an event occurs. You may never need to refer to it, but it is better to prepare it when you are cool and collected, rather than in crisis mode! Ideally, you should have a strategic plan and back up for all services that your organisation buys in - to be prepared for any unforeseen events.

4. If you have yet to purchase new or replacement software, you could ask potential vendors whether they are likely to be taken over or merge with another vendor. But, they may not know and even if they did, may not tell. Business consolidations and takeovers can happen quickly. However, they may be able to give you some reassurance or information of how they intend to look after their customers and any likely process, should it happen.

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