The Situation – Because of the recession, companies have become more vigilant about their operating expenses. IT budgets in particular are under the microscope, and software maintenance and support expenses are in center view.
It’s unfortunate that it took a global recession to get companies to take a closer look at the expense of their software deployments. Better now than later (or never), but the thought of so much money wasted (under-utilized) is disturbing. No complaints from the software vendors, of course, but after actually analyzing their software expenses, many software buyers are feeling embarassed and even angry.
The concept of software maintenance and support fees will go down in history as one of the greatest commercial ploys of all time. Along with cheap printers whose replacement ink is almost as expensive by weight as gold, and the old “rinse and repeat” instruction on shampoo bottles, the concept of software maintenance and support is sheer genius. That much I will grant software vendors.
There comes a point, however, at which tolerance of an industry norm is no longer acceptable. In the case of the software industry, I think we have reached that point, and it has taken the form of abusive, if not unconscionable, pricing for maintenance and support.
In a recent article
she wrote for the Wall Street Journal, Jessica Hodgson claims that Oracle enjoys a hefty 85% profit margin on its maintenance and support fees. In my experience, Oracle is the worst offender in the category of outsized maintenance expense, and SAP runs in second place year after year. But most other software vendors are nearly as bad (abusive).
What You Can Do – Good news, bad news. The good news is that there are many things you can do–many approaches you can take–to reduce your ongoing software maintenance and support expenses. The bad news is that I can’t list them all here in this single post, at least not with sufficient detail to help you in a meaningful way. So, look for follow-up posts in which I will go through various techniques, one by one, with some real-world experience and examples thrown in. I can help you pop the maintenance and support bubble and start saving some real cash.
Take me to Part Two: Reducing Maintenance Costs – Quick and Dirty Approach