It’s no secret that maintenance and support costs are the main source of revenue for software publishers and form the major part of software budgets for end users. When you purchase software licenses, you will most probably purchase support and maintenance as well. Support and maintenance typically include the right to make use of new product features, regulatory updates, bug fixes and phone, web-based or even on-site support when you need help with your software. The costs usually represent a percentage of the (net) license fee and typically amount to approximately 20% of the license fee.
Publishers usually do not offer discounts on contractually agreed maintenance and support fees. Procurement officers are often very focused on the up-front license price and are not always taking the recurring annual support maintenance fees into account.
A piece of advice: don’t get tricked into buying licenses that you don’t currently need just because you’re being offered a substantial discount. Keep in mind that most publishers apply an annual indexation to the maintenance and support cost.
And to make it even more complicated for the end users, some software publishers have strict clauses on how the end users can terminate support- higher prices for the remaining support, “all in, all out” conditions with no chance to terminate support for some licenses only, high reinstatement fees in case you want to go back on support etc.
So, what can you do? If you’re concerned by now, the good news is that there are some things that you can do to keep these costs under control. Read our tips below.
Some software publishers offer different support types and maybe a less expensive one is sufficient to cover your business needs. Of course, this only applies when the vendor has two or more support levels.
Maintenance fees are not cast in stone. For example, you can ask for a lower percentage than the standard one. Or you can ask for maintenance fees to be based on the discounted price of the software, not the list price. Keep in mind: if you don’t ask, the answer is always no.
When entering into a new license agreement, you can typically negotiate to have a fixed support price for a couple of years, under the condition that you will not terminate licenses or cancel support for part of the licenses that fall under that agreement. It’s more difficult to re-negotiate the terms of an existing contract, especially when you try to lower your costs.
Too often, companies pay maintenance costs on unused or underused software. Evaluate your software portfolio to see which applications can forego support. Canceling maintenance for older or less critical systems might be another alternative, especially if you seldom use the help desk and are not planning to upgrade in the future.
More and more companies are turning to third-party support options that offer a competitive level of service for a fraction of the cost – as much as 50 percent less in some cases.
For some applications, cloud or open source software might be an alternative, with maintenance either bundled, provided in-house or through a third party.
In order to save cost on your recurring support maintenance bill, it is important and actually required even, to have a complete overview and accurate understanding of the contractual terms and conditions under which you purchased (or can purchase) the licenses, support and/or cloud services.
Make sure to also determine your actual deployment and/or consumption of the different software licenses and/or cloud services. How you need to establish this, varies per software publisher.
If you have any questions or if you’d like to have a conversation with a specialist to determine what options you have to start saving costs in your particular situation, don’t hesitate to reach out to us.
If you have any questions or if you’d like to have a conversation with a specialist to determine what options you have to start saving costs in your particular situation, don’t hesitate to reach out to us.
