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Deferred Maintenance & Enterprise Software

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Recently I watched an interview on one of the financial news networks with Larry Summers - the well known American economist, former President of Harvard University, and U.S. Secretary of the Treasury. He was discussing the topic of deferred maintenance. Specifically he was discussing how deferred maintenance, as any homeowner will attest, always costs more than taking care of the problem in the first place. It’s an insidious cost that stealthily compounds over time. You either pay now or you pay later.

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That got me thinking about the enterprise software industry. And I realized that there is something even worse than deferring maintenance in this industry. But first, let’s take a moment to clarify what we mean by maintenance. There are typically three components that software vendors charge for:

  • Software License - the right to use the current version of the software at the time of purchase
  • Support - the right to receive help with problems from the vendor (phone, chat, email, etc.)
  • Maintenance - the right to receive software updates (both defect fixes & new functionality) beyond the current version of the software

Some vendors sell a perpetual software license (right to use current version forever) up-front and then charge annually for an inseparable support/maintenance bundle. Other vendors sell a subscription which is an inseparable bundle of all three items (once you stop paying you cannot use any version of the software). There are pros and cons to each approach, and different buyers have different preferences.

So what’s worse than deferred maintenance is the enterprise software industry? It’s paying for enterprise software maintenance and the vendor stops investing in the product. You pay now and you pay later. Your company keeps making the payments, but the software never adds any new functionality. It’s the worst of both worlds. The vendor is hoping that its customers will continue to pay because it would be painful for them to switch to another vendor. They are laughing all the way to the bank and using your money for who knows what.

So what can you do about it? First of all, be sure to perform extensive due diligence before purchasing any enterprise software. Then be sure to thoroughly scrutinize the records of both the particular software title that you’re considering as well as the vendor itself. Do they invest in the product? Do they have a vision as to where they want to take their product. Do they have a roadmap which demonstrates ongoing investment?

Deferred maintenance is a very real and very costly expense. Don’t be taken advantage of by enterprise software vendors that are not investing in their products. Align yourself with vendors that have a compelling vision and that are committed to making the investments necessary to see that vision through.

 
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