Magazine article American Banker

Revamped Software Licenses Allow Banks to Reap Savings

Magazine article American Banker

Revamped Software Licenses Allow Banks to Reap Savings

Article excerpt

Negotiations with Computer Associates International Inc. have eliminated duplicate software licensing fees for Citicorp, PNC Financial Corp., and State Street Boston Corp.

Citicorp said last week that its new licensing agreement covers all operations worldwide and would include future development.

One analyst estimated that Citicorp, by consolidating all its software licensing from Computer Associates into a flat-fee agreement, would save about 10% annually. As the largest U.S. bank, Citicorp pays millions of dollars annually for software.

Citicorp declined to say how much it would save.

A Breakthrough

Citicorp, PNC, and State Street Boston are among the first big customers of information technology to sign so-called enterprisewide software licenses that allow movement of programs from one site or one type of computer system to another without incurring new fees.

Until now, higher fees have been charged for software running on a mainframe than for software running on a midrange or personal computer.

This tiered pricing has been a source of consternation for technology customers over the years. And Computer Associates came under particular attack, since it holds the biggest market share of mainframe software licensing.

Flexibility on the Agenda

The problem has grown acute as big banks move software applications off the mainframe to networks of personal computers, or conversely, as they consolidate software from many acquisitions into a single data center. …

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