For many CIOs, the cost of updating and maintaining hardware doesn'teven come close to the numerous costs associated with software.There's licensing fees, patches and service packs, maintenance,customization and frequent upgrades that hit the market faster thansome companies can roll out the previous version.

There's an answer. Don't upgrade. And look to negotiate abetter deal.

Ted Barnicoat, CIO of Trimac (2001 profit margin: about 3 percent) iswell versed in the art of unearthing cost savings from softwarecontracts. His talent is a necessity - Trimac, a bulk carrier andtransportation company based in Calgary, Alberta, has an IT budget of$5.5 million to support 5,500 employees and 130 branch locationsacross North America.

Barnicoat's knack for minimizing costs has been honed by years in thetrucking industry, a notoriously low-margin business, particularly forbulk carriers that haul loads such as chemicals and paint. Bulkcarriers require special trailers, some that can be pressurized orheated, and have very strict delivery deadlines.

Every year, Barnicoat takes a look at software contracts about to comeup for renewal and renegotiates with his vendors. "Software is a majorcost to us, and we do this because the vendors tend to be flexibleabout renewal," he explains.