Which is better for my wallet? Maintenance Plans or Upgrades? The answer: Yes
Category Maintenance Upgrades Software Contract Negotiation Tactics
Really, I suppose the answer should be “That depends.” There are many options, many price scenarios and many different methods of purchase, depending on the products and publishers. I’ve had people quite concerned when their maintenance offering wasn’t the standard 18% they thought it should be, but there are no rules of engagement for the IT industry overall when it comes to software pricing.
Here are a few questions you will want to have answers to before you can make the decision as to what is best for your particular scenario.
Really, I suppose the answer should be “That depends.” There are many options, many price scenarios and many different methods of purchase, depending on the products and publishers. I’ve had people quite concerned when their maintenance offering wasn’t the standard 18% they thought it should be, but there are no rules of engagement for the IT industry overall when it comes to software pricing.
Here are a few questions you will want to have answers to before you can make the decision as to what is best for your particular scenario.
What options are available?
Maintenance can be priced per license, per site or per company. It may be a one-time mandatory purchase, mandatory annual fees or optional from the very beginning. When evaluating software, ensure you know your options at the beginning of the contract for annual budgeting as well as having an exit strategy should you need to cut costs in the future. Is it possible to purchase upgrades separately or are they only available through the maintenance program? Is there an option to discontinue maintenance in the event of an economic hardship, then pay a fee to reinstate the maintenance later on?
What is included with maintenance?
Does it include support or is that a separate charge? Are there any extras such as eLearning, training, technical services, etc, or is it just for upgrades? Are there additional licensing benefits to the maintenance such as the Microsoft Desktop Optimization Pack included only with Software Assurance on the Windows OS license?
What is the price structure of maintenance vs. upgrades?
Microsoft doesn’t offer upgrades through their licensing programs, they are only available with Software Assurance (SA). With Microsoft, SA is 29% of the license price per year, so if you plan to upgrade and take advantage of some of the other benefits offered with this program, you will need to ensure you get the value of the purchase within the three years of the contract. If you decide to only upgrade every 4 to 5 years and are not using the benefits such as eLearning, it would be more advantageous to just buy a new license when you are ready to upgrade. In the case of Adobe Acrobat Professional, an upgrade is approximately half the price of a new license, but two years of maintenance is actually less than the price of a single upgrade. Even if you only get one upgrade in the two years, you are spending less money than you would by purchasing the upgrade license.
Summary
There are many factors to consider and each publisher offers something completely different. Knowing your options going in, will make all the difference in knowing how you can react if there are sudden changes to your business model.
You will need to recognize that some publishers will not budge on their maintenance structure as they do not have the means to individualize the contracts. In other cases if the solutions offered by your software publisher do not meet your requirements, you will need to make negotiation of the maintenance a crucial point in signing the contract, but be prepared to walk away if you can’t come to an agreement. In many cases, if you have a reseller working with you, they can help you to work through the value propositions and give you some insight into the flexibility of the publisher if you need to negotiate exceptions.
Maintenance can be priced per license, per site or per company. It may be a one-time mandatory purchase, mandatory annual fees or optional from the very beginning. When evaluating software, ensure you know your options at the beginning of the contract for annual budgeting as well as having an exit strategy should you need to cut costs in the future. Is it possible to purchase upgrades separately or are they only available through the maintenance program? Is there an option to discontinue maintenance in the event of an economic hardship, then pay a fee to reinstate the maintenance later on?
What is included with maintenance?
Does it include support or is that a separate charge? Are there any extras such as eLearning, training, technical services, etc, or is it just for upgrades? Are there additional licensing benefits to the maintenance such as the Microsoft Desktop Optimization Pack included only with Software Assurance on the Windows OS license?
What is the price structure of maintenance vs. upgrades?
Microsoft doesn’t offer upgrades through their licensing programs, they are only available with Software Assurance (SA). With Microsoft, SA is 29% of the license price per year, so if you plan to upgrade and take advantage of some of the other benefits offered with this program, you will need to ensure you get the value of the purchase within the three years of the contract. If you decide to only upgrade every 4 to 5 years and are not using the benefits such as eLearning, it would be more advantageous to just buy a new license when you are ready to upgrade. In the case of Adobe Acrobat Professional, an upgrade is approximately half the price of a new license, but two years of maintenance is actually less than the price of a single upgrade. Even if you only get one upgrade in the two years, you are spending less money than you would by purchasing the upgrade license.
Summary
There are many factors to consider and each publisher offers something completely different. Knowing your options going in, will make all the difference in knowing how you can react if there are sudden changes to your business model.
You will need to recognize that some publishers will not budge on their maintenance structure as they do not have the means to individualize the contracts. In other cases if the solutions offered by your software publisher do not meet your requirements, you will need to make negotiation of the maintenance a crucial point in signing the contract, but be prepared to walk away if you can’t come to an agreement. In many cases, if you have a reseller working with you, they can help you to work through the value propositions and give you some insight into the flexibility of the publisher if you need to negotiate exceptions.