Tuesday, August 19, 2008

changes in software maintenance

There appears to be a growing revolt against the boilerplate approach to software maintenance pricing(see zdnet). As a vendor, I appreciate how much revenue this draws in. At the same time from a customer standpoint it can be a challenge in today's cost-cutting environment.

The idea of declining fees or a customer-specific agreement are an interesting and at the same time troubling idea.

Successful software companies are often judged on their maintenance revenue. A company relying on just implementation dollars could be considered a consulting company. This will change the way software companies are valued, and force them to create new

Is the customer actively applying updates?
Is the customer constantly calling for support or new enhancements?
Perhaps the fee would be based on some level of activity metric. Do you have new users entering the system? Rolling out a new phase?

Maybe some sort of rolling average factoring support calls, implementations and active users.

This seems to ring true as a better way to provide value to clients. At the same time this adds much more complexity to software maintenance. It would almost sound like an annual negotiation process between vendor and client debating on the merits of their app usage. A reasonable process could keep clients who can't justify the baseline maintenance fee given their usage.

Is this a necessary evolution vendor nightmare?

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