NET(net), Inc.


Maintenance Percentages by jigordon
June 12, 2007, 1:54 pm
Filed under: fees, maintenance

How much are you paying for software maintenance?

In the last 10 years, it seems that the average price for maintenance has increased from 8-10% for basic maintenance to nearly 20%. The underlying service hasn’t changed. Software really isn’t THAT much more stable than it was a decade ago (twice as stable? I doubt it). So what’s up with the increase?

Personally, I think it’s laziness. No, not on the part of software vendors. They’re doing what the oil companies are doing… which, in essence, is what basic economic theory demands they do. They’re increasing their price to the point that the market will bear. And, for whatever reason, buyers have been paying higher and higher maintenance costs. In fact, I received an invoice the other day for 30% maintenance for 8-5, M-F, no frills service!

I’ve been saying this for years, so now I’m going to repeat it while I know a few folks are really listening:

Stop paying outrageous prices for maintenance and support!!!

Please. Really. Because if you accept that higher maintenance price, the vendor is going to expect me to do it, too. And I’m not willing to pay high maintenance prices for the same service I was getting 10 years ago. Oh, and I definitely don’t want to be paying that price against the “then-current list price” of the product.

So, buyers, do the rest of your fellow buyers a favor. Don’t accept high maintenance prices without a comparably high level of service. 12-15% is about right for basic maintenance these days. Which includes bug fixes, updates, upgrades, new releases, etcetera. Pay up to 20% if you’re getting 24×7 service. Anything higher should be “white glove”, on your doorstep the next day, kind of service (which, btw, nobody seems to want to provide).

Vendors, charge a reasonable amount for maintenance and support or be prepared for some buyers to cancel their maintenance contracts (or not buy any more at all). M&S used to be a fairly steady stream of continued revenue. But unlike car owners, I don’t need my maintenance plan to use my product indefinitely. This isn’t a threat… it’s just the ranting of a guy who recently finished his MBA Economics course and is feeling a little bold today.

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