Precise Guarantees ROI for Software

In this economic climate, plenty of software salespeople talk about offerings that pay for themselves. One application performance management provider is going one better with a 100 percent return-on-investment guarantee.

Precise Software Solutions Inc. this week will begin its ROI Guarantee program, which promises a 100 percent return within 12 months of deployment of its Precise/Indepth for Oracle application performance tuning software. Users said the software pays for itself in less than 12 months.

"Probably within 60 to 90 days, it paid for itself because we could forgo [upgrade] purchases we had planned and didnt have to devote the man-hours to that," said Dan Nichols, IS manager at Channell Commercial Corp., a plastics manufacturer in Temecula, Calif.

The manufacturer had planned network and processor upgrades to eliminate performance problems with its companywide Oracle Corp. applications suite, but, instead, the company used the Precise tool to determine how to make application code more efficient.

"We still have 90 percent of the hardware we had two years ago [when the applications suite was deployed]," Nichols said.

Over the last year, many software providers have looked for ways to document the potential savings their tools can offer. Now, although its not a strict requirement to use an ROI calculator or customer case studies, its a lot harder to sell software without it, said Richard Ptak, an analyst at Hurwitz Group Inc., a Framingham, Mass., consultancy.

"There is a lot of healthy skepticism around purveyors of IT solutions. Theyre being held to what they say. If you dont have an ROI story of some sort, [customers] will be skeptical," Ptak said.

Precise, which is using its own ROI calculator in the guarantee program, is backing up its guarantee with free services if a customer doesnt achieve the promised savings.

Precise follows up with the assignment of remote service personnel to guide the users efforts for three months, said officials of the Westwood, Mass., company.

Ptak warned that not all ROI models or calculators are accurate. "Some of the early models were not very rigorous. Some potential savings claims were pretty reckless. But the current calculators and models are being created with greater care to make them realistic," he said.

The Precise calculator uses such parameters as annual developer or database administrator savings, deferred server upgrade savings, cost/transaction annual savings, and annual end-user productivity savings. The guarantee program uses Precise Quick Start ROI Audit to measure the parameters.

"I thought the ROI calculator was right-on," said Robert Sacca, manager of database services at the Research Foundation of the State University of New York, in Albany.

Precise intends to extend its guarantee to its other software tools throughout the year.