their revenue will come from training and consulting. So you need to examine these as well.
I think it's quite reasonable for a vendor to say: 33% up front, 33% after 6 months and the balance in a year - and you can opt out at any time. For training, consulting and license costs. Perhaps the maintenance costs can be pro-rated to 6 months for the first bit - or perhaps they're already included (i.e. buried) in the initial license cost. Maybe you'll need them unbundled so that your capital costs are lower. Beware of vendors that will require that you pay the full amount up front. Maybe the tool will do everything they say, but maybe it will cost you an arm and a leg in consulting services. But if you've sunk your budget up front, and now have to pay significant consulting fees, or risk looking like you made a bad choice, you're not going to be happy, and neither is your boss.
Vendors know that CM/ALM is a significant backbone application. They should be more than willing to help you through a pilot project with partial payment up front. If you're acquiring for a large project or for a corporate standard, let the vendor know and negotiate a "pilot" project price and payment schedule. And let them know that you're not willing to pay more than a certain amount for customization and consulting. If they can't meet the terms, you really have to be somewhat suspect about the technology or at least the ultimate cost of the solution.
What if they guarantee that their solution is best? Well be careful about the terms of the guarantee. Some vendors are willing to give away the tool (i.e. give you your money back) while they collect training and consulting revenue. Now they may get a bad name if you really don't like their solution, but there may be a legal clause covering publication of your negative impressions. Still some guarantees are a bonified claim that a vendor believes their tool is the best. If so, you'll also notice a willingness from them to admit that their tool is perhaps not the right choice for your specific requirements.
THE BOTTOM LINE
The bottom line is: don't use up your budget and resources until you're sure you have a good solution. It may not be perfect and maybe you end up with the second best instead of the best fit, but make sure you have a good fit before all of the money is placed on the table. If a CM/ALM vendor thinks that's unreasonable, tell them you're not interested. They want the sale and will either admit that their tool has some issues with respect to your requirements, or will propose reasonable payment terms to you.
Go into an evaluation prepared. Pay close attention to the big items. Make sure the tool is flexible enough so that you don't have to pay too close attention to the little items. Make sure you can get into the new tool easily, but also make sure it's easy enough to get out if things don't work out.
Look at your vendor as a partner. You'll be dealing with a small number of vendor personnel, whether a large company or a small company. Make sure they understand you want to minimize risk. They likely do too because every successful implementation of their tool is free marketing and a set of potential reference customers.
Apart from the article proper, I've tried to put together a number of CM/ALM tool functional requirements that may