Enterprises can remain at the mercy of vendors' high-priced support and maintenance (S&M) agreements for only so long. If vendors continue playing hardball with their customers, they are likely to face substantial customer defections, with customers seeking alternative options. To learn more about software maintenance and support, please see Will User Enterprises Ever Get onto an Easy (Support and Maintenance) Street?, Support and Maintenance: No Longer the Software Industry's "Best Kept Secret"?, and What Is the Value Proposition of Support and Maintenance?.
What Are the Options, Then?
Enterprise software licensees should be aware that they have several choices when it comes to software S&M providers. Any company considering terminating S&M of an application product should first talk to its current vendor to fully understand its options, which are as follows:
- Continue the status quo—a user company can always continue to pay the maintenance fee to the vendor, meaning the user enterprise can defer its decision to discontinue S&M each year, especially if the user company is expecting some tangible value by remaining on the contract. For instance, some risk-averse enterprises running complex business processes worldwide, with highly heterogeneous information technology (IT) environments, might still find it worthwhile to invest an additional chunk of money into their S&M agreements, either for their peace of mind or to reinforce their relationships with their vendors. However, this option will not appeal to user businesses whose current software instances are highly functional and often customized to meet their unique needs. Moreover, users with such stable platforms and instances should remain cautious of forced upgrades that can potentially introduce new issues due to unneeded software changes. Enterprises save time and money when only the fixes they need are applied, and unnecessary fixes and enhancements bundled into a broad patch or update are avoided.
- Renegotiate—users that are not satisfied with the value proposition of their service and maintenance contracts may want to try to change the agreements. User businesses can demand that their vendors give them more value, such as provide more knowledgeable support engineers with detailed understanding of the customer environment; provide senior, experienced engineers as opposed to generic help desk personnel; grant faster response and actual fix times, focused only on users' specific needs and requests, etc.; or that vendors reduce their prices of the agreements. Some relief for users might be in the offing, or they might gain the upper hand because of the current market dynamics, such as new deployment options (that is, on demand or software as a service [SaaS] and open source). These recent software developments may serve as ammunition for shrewd IT managers in their quests to reduce their budgets and in bargaining with vendors. In particular, those enterprises that are tired of never-ending, forced marches to upgrades might want to consider switching to SaaS, at least for a part of the functional scope (see Software as a Service Is Gaining Ground). For some applications, open source software might be a cheaper alternative, with maintenance either provided in-house or through a third party (see Why Open Source is Important to You).
- Discontinue—if neither of the above options is satisfactory (or if either fails to provide an acceptable value proposition notwithstanding), and still the vendor does not show any flexibility, user enterprises might want to turn to some hardball tactics of their own. This is especially true of those environments that have no frequent problems or that are good at controlling problems on their own. Such user businesses can always discontinue the maintenance agreement. An analogy here that illustrates such a situation is that of a car that is either maintained by an accredited car dealership (which is, as a rule, more costly) or by independent mechanics shops (if not solely by a mechanics-savvy owner). If regulatory and compliance updates are not a big issue, and upgrades are not a priority, the savings from dropping maintenance altogether may outweigh the risks. Canceling S&M contracts (sometimes referred to as "going naked") for older or less critical systems might be an alternative too, especially for self-sufficient users that seldom use the help desk and that are not planning to upgrade in the future. As a last resort, there is always the so-called "nuclear option"—switching to other competitive software providers and solutions.
- Recently, the notion of a reconfigure option has emerged. A user company can change or adopt only what it needs, which may mean outsourcing modifications (to third party service providers), cutting off hotlines, etc.
One of the main questions that vendors usually do not like to answer is how expensive it would be for a company to resume maintenance once it decides to drop it. Some vendors say that they would refuse a company's request to take up maintenance again, but one should remember the phrase "money talks." This is apparent in Infor's recently introduced amnesty program for S&M defectors from many older products that have previously changed too many owner vendors' hands.
Contrary to vendors' warnings, the path of discontinuing S&M is often reversible by re-subscribing or relicensing the applications, and most vendors will allow an ex-user company to resume maintenance if it pays a penalty and upgrades to a supportable release level. Hence, users should be fully aware of this option before they make the final decision to discontinue maintenance. In our experience, a customer has always been able to get back on support and upgrade to the current level—it is only a matter of how much this costs the customer.
Further, since even legacy software will still require some maintenance, competent internal support and access to skilled external resources for support issues should be in place. In other words, users' questions still need to be answered, and modifications and core code still need bug fixes and enhancements. Enterprises must ascertain how they will provide for these needs. Some companies may decide to go it alone, meaning they will use internal resources to provide for their needs. While this option can be successful for some companies, the risk here becomes one of potentially losing the few rare IT people who understand the software. Often, IT professionals prefer to work on the newer and "cool" technology than to support older technology, and companies should be sure to give its internal resources the job satisfaction they need to continue providing the support the company needs.
What about Third Party Support Providers?
Some companies go to a third party to get the support they need, as it has recently been proven that maintenance fees can be reduced by half or more using this alternative. Such companies are usually consulting firms that have a critical mass of individuals with strong backgrounds in the aging product. In the past, retention by the third party of the businesses in question might have been risky in this kind of relationship, but the recent consolidation of vendors and the subsequent exodus of knowledgeable staffers have certainly mitigated that issue.
Another issue stems from the fact that user companies do not own the source code, which may limit the things they can really support and fix somewhat. Unavailability of the source code might open the software applications customer up to a number of risks, including failure to meet compliance regulations, inability to take advantage of security and platform changes for the underlying technology, and inability to correct software errors that occur within the underlying software application code.
Still, based on the above concerns of common users, and supported by a compelling value proposition, the alternative S&M industry is rapidly growing because it addresses and fills an important need in the enterprise software market. Businesses that rely on alternative S&M offerings have achieved proven benefits for many years, and these results have validated the industry and eliminated the perceived risks that have been perpetuated by software vendors. Third party maintenance options do have a role in the market, since they do lower the costs for enterprises and take out some of the sting of paying for S&M (including new product releases that are never implemented and used).
Rapid consolidation has left a gap in the marketplace, whereby customers want support, but vendors are either not giving these customers what they need, or they are, but at a price that cannot be justified. For example, vendors hate supporting older versions of software, but that is what the majority of their customers have. Many customers have also modified their product instances, and vendors will not happily touch or support modified versions. Therefore, as long as these third party maintenance firms look at and address the needs of customers, they will do well. On the other hand, vendors have different business needs that restrict them from addressing many of those particular customer needs.
This is part four of the series Will User Enterprises Ever Get onto an Easy (Support and Maintenance) Street? Part five discusses the conditions that place some companies in a better position to benefit from alternative software support and maintenance.