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Resiliency insurance replaces 'good faith' when selling software and services

The year 2020 and the responses to the crisis have forced a re-evaluation of risk by customers and suppliers alike. The key word is “Resilience” and it is fast becoming a key part of sales negotiations, particularly in the drive to digital transformation and cloud that has seen a rush of changes as customers realise they can move quickly in a new direction, says Ollie Whitehouse, Chief Technical Officer at NCC Group.

Offering software protection becomes a real differentiator, he says: it enables the software supplier, ISV,  MSP or  channel to say: “it is not just me standing here behind the product, I have NCC group with all its experience and expertise who are carrying this risk for us.”

“We are seeing the service come to the fore in many deals now – it is clear that the world is maturing beyond good faith. For example, we are working with private equity quite a lot and we have recently seen a case where a customer forced a vendor to go to escrow as part of its funding round. The idea was that the customer would be protected if the software company failed to raise the next tranche of cash. In the event, the customer was protected when the software business could not continue and had insolvency issues. There is an understanding that if the ‘amazing technology’ and the company behind it  does disappear for whatever reason, it acts as an insurance policy. We are now seeing a lot of this being asked for by customers.  

Ollie Whitehouse: “It is like an assurance policy – and GDPR and 2020 have focused minds on issues around transferring risk. We are seeing vendors moving to cloud and annuity revenue which means more questions being asked about risk issues and the long term. It certainly tends to become an issue in the sales process once a purchasing department gets involved and raises financial diligence and compliance. Then comes the questions of the suitability of the supplier in the event of an incident. It may come as part of the RFP, or arises once you are on the way to concluding the deal. But it is definitely becoming much more of an issue.”

For the software provider, it obviously helps them to differentiate and also offers an additional item on the list with a margin, he says.  As an insurance service, it can be tailored to be appropriate to the customer and supplier or built into standard software offerings.

Join Ollie Whitehouse and John Garratt, Editor of IT Europa for a quick-fire run through the markets, sales techniques and issues around selling software resilience in both related and other sectors. On November 19 at 12.00, a special webinar offers the insights you need if you are engaged in selling software and services: Increasing Value by Enhancing Resilience and Mitigating Risk
Register here