A journalist contacted me last week on the subject of vendor maintenance and support contracts. Maybe Spectator readers can help him out.
He wanted to know if I had seen evidence of a trend for companies to "essentially forego support and maintenance contracts for enterprise applications, hardware, or networking infrastructure, electing, instead, to have internal IT support the products." He also wanted to know if I had an opinion on what types of IT products are good candidates for abandoning vendor support.
His inquiry got me thinking on this subject."Going naked"
The practice of just saying no to support contracts has been going on as long as software vendors have been charging for maintenance and support. It may sound crazy, but it may make sense to abandon vendor support if an organization (a) has highly modified the software, or (b) is running on an older release no longer supported, or (c) intends never to upgrade, or (d) plans to migrate from the system in the near future.
I think that any software package for which vendors charge maintenance for is a potential target for a “go naked” strategy. Systems that have frequent regulatory updates (think, payroll, or sales tax compliance) have a stronger business case for staying on maintenance. But systems that have maintenance/support contracts only for bug fixes, or help desk, or access to future enhancements have a weaker business case for vendor support contracts.
An alternative to “going naked” (as this practice is sometimes called) is to buy a maintenance/support contract from a third-party service organization, such as TomorrowNow or Rimini Street.
My own opinion is that the trend has increased toward going naked, or signing up for third-party support, as software vendors have increased their fees for maintenance to the point where they may not be justified in a larger percentage of cases.Good idea or risky tactic?
Vendors love their maintenance and support businesses. They provide recurring income and often carry the highest profit margins of any revenue source. But do maintenance contracts always make sense for the buyer?
Now I'm looking for examples. Do you work for an organization that has dropped its maintenance contract for an existing system? Was this the right decision? Leave a comment on this post or email me with details.Related postsReading the fine print on ERP contractsHigh software maintenance fees and what to do about them