The generally accepted definition of “cloud services” – even the one prescribed by the U.S. Government (PDF available here) – includes the existence of metered or measured service – usually a flat rate that scales along with the service consumed. Now one of the cloud’s most prominent competitors is opening up its enterprise license program to negotiation, enabling big customers – perhaps including the government itself – to name their price and enter into long-term, fixed-price deals.
Box.net’s move, announced this morning, opens the door for potentially very large customers to enter into long-term arrangements that would otherwise be quite expensive. Think businesses with tens of thousands of users – for example, P&G.
The Return of Deal-making
“It’s not at all uncommon for software providers to have an enterprise license agreement [ELA], but very atypical to date in the world of cloud,” acknowledges Whitney Tidmarsh Bouck, Box’s general manager for enterprise products, in an interview with ReadWriteWeb. “What we’re doing is formalizing a program around enterprise license agreements for Box. Like a typical ELA, this is about purchasing for a wide array of users, with a pre-negotiated price, potentially in a multi-year arrangement that locks in a really good price for the customer, so that they’re getting the most cost-advantageous deal and that they simplify their overall purchasing with us.”
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