Monday, November 17, 2008

Monday’s Musings: The Three Pillars of Software Maintenance And Support Policies

After more than 350 conservations with customers about the maintenance and support issue in the past 4 months, it’s becoming quite clear users expect from their software vendors. While those issues can be broken into tens of categories, three themes have emerged that include:

  • Choice. Customers want to choose between tiered plans. The best plans allow customers to select the option best for them. Choice means the availaiblity of a basic plan or the full range of services expected in a comprehensive “insurance policy”.
  • Value. Users expect plans to show ROI or meet service level agreements (SLA’s). These SLA’s should reflect outcomes not just process. If a user contacts a help desk 5 times a year and pays $500,000 in maintenance, at $100,000 a call, they better be getting platinum response levels of 1 hour or less and a resolution in 24 to 48 hours.
  • Predictability. Maintenance and support remain one of the biggest budget items in the ownership of packaged apps. Changes in price, policies, or service levels should be communicated with at least 4 quarters notice. The best vendors provide guidelines that give customers predictability 2 to 3 years in advance.

The bottom line- can vendors deliver on such promises?

Let’s see which vendors can deliver on all 3 pillars. Recent financial analyst reports from investment houses (i.e. Merrill Lynch’s Kash Rangan w.r.t. Oracle and Merrill Lynch’s Raimo Lenschow w.r.t SAP) indicate a sharpening downward trend in revenue estimates, not only for Q4 2008, but also for FY 2009 and FY 2010. Software vendors under pressure to make margins will be forced to choose whether they are willing to take short term pain in stock valuations for long term gain in improving the vendor-client commitment or make their numbers by disenfranchising customers during a time of crisis by violating any one of the three tenants of maintenance pricing. Because many software vendors have blown through their Q1 2009 pipe in Q4 2008, new deals are scarce and maintenance revenues are the easiest targets for “guaranteed” revenue and price increases.

Your POV.

Are you being hammered in your existing maintenance arrangements? Do you feel locked in or do you feel your vendor is willing to work with you on deals? Feel free to share with me your experience. You can post here or send me a private email to rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.

9 comments:

marry said...

Thanks For posting a keep upadte a more articles

With regards
eserviz

Anonymous said...

Thanks for your sharing. Please visit for more downbload: http://www.bestsoft4all.com

best software solution said...

Thanks for good share...

Inventory POS System said...

I like your article and it really gives an outstanding idea that is very helpful for all the people on web.

Unknown said...

Your articles support me a lot in all mediums of subjects.
c2logix.com/

Unknown said...

I have been getting a lot of useful and informative material in your website.
price per head service

Antic_Hero said...

I sent your articles links to all my contacts and they all love it including me.domain name

Anonymous said...

Hey
it's very interesting what you write.
I really like your blog - you can learn a lot from it.
This is very valuable knowledge for me :)
Recently I became interested in solutions in the cloud. I would like to introduce them in my company
I found an interesting offer on the website https://pro4people.com/contact/ .
What do you think about it?

Ferahtia_Fs said...

Merci pour ce partage ce travail