Software maintenance support

One area of outsourcing that more and more companies are considering is software maintenance. Typically software companies charge an annual fee of 15–20 per cent of their ’list’ prices for maintenance.

Maintenance coverage usually includes:

• hot line telephone support

• fixes to reported software bugs

• upgrades to the latest software releases.

Maintenance represents a substantial portion of all software suppliers’ revenues. In fact, many suppliers have been able to survive slow periods solely on their maintenance fees.

However, if you analyze how software suppliers spend their maintenance revenue, you discover that the majority of maintenance is spent on developing new software releases and only a relatively small portion is spent on providing hotline or bug fix support.

Like all products, software goes through a lifecycle. Therefore, when a user organization decides that it does not want to purchase any more upgrades of a software product, they should consider outsourcing their maintenance to a third party. Software supplier maintenance, at this stage of the lifecycle, is often a waste of money because the user organization:

• is on a very stable version of the product;

• rarely reports any new problems to the supplier;

• is usually told by the supplier to upgrade to later releases to fix any outstanding problems;

• has no intention of spending time and resources upgrading.

Expert third-party maintenance support organizations have evolved which provide software ’insurance policies’ that guarantee organizations receive expert advice and support in times of need. One such company, Centaur Application Software Services, claims that the cost of third-party maintenance can be as little as 15 per cent of the cost of the supplier’s maintenance fees. Another advantage of third-party maintenance is that organizations can tailor the support to their own unique needs instead of accepting the supplier’s usual maintenance terms and conditions.

Outsourcing software maintenance means that organizations only pay for the support and insurance that they actually need. They are no longer paying for the development of new software releases they never intend to use.