An ongoing part of any corporate IT budget is the maintenance and support costs required to keep much of their equipment running efficiently.  A product’s support cost is basically a yearly subscription for free software updates and patches as well as free technical support should it be needed (and there is needed one day).  Most of the time, it allows the customer to upgrade to a newer version of the application should it be released within the time period of the support contract.  This feature alone can save an organization thousands of dollars in the cost of upgrading.  Eventually upgrading to a newer version is inevitable anyway as vendors will discontinue supporting older versions eventually.  These costs can easily go into the six-digit range.

For those of you who have a licensed copy of antivirus software of some sort on your computer, you are already familiar with the concept.  For instance, let’s say you have a copy of Symantec‘s latest AV software on your computer and you have a twelve month license for it.  This means that for 12 months, your computer will continue to grab all the latest Symantec antivirus updates throughout the term of the license.  It will also allow you to acquire technical support of some type depending on the terms of your license free of charge.  This entails either telephone or email support.   Should you choose not to renew your license or subscription, the application will continue to operate and protect your computer according to the antivirus definitions it has as of the final day of the former license period.  You will also not be able to obtain future technical support.

For instance, the network that I manage has a firewall to protect it.  Each year we purchase a maintenance and support license for it in order to continue to get the latest patches and updates for the firewall software and for technical support.  Because the firewall product is software based and does not offered in a preconfigured device, we have it running on a server that also has a service and support contract.  The total yearly service and support cost for the firewall is about ten thousand dollars.  In an earlier blog I talked about the prominence of Blackberry servers in networks today.  We purchase a yearly Blackberry Support license for patches and updates and of course tech support.  The cost structure for it is based on the number of blackberry subscribers that are serviced by the server.  Again, the Blackberry Server software runs on a server that also has a yearly support contract.  

Support costs go out the roof when one starts talking customized database software.  Oracle, the largest database software vendor in the industry just increased their maintenance contract costs to 22% of the initial purchase cost of the software.  Believe it or not, it is not uncommon for a medium sized organization to spend a half million dollars on such a software application.  Large organizations can easily spend a million dollars, which translates to and annual expense of $220,000 for patches, upgrades and tech support.  In a slow economy, some organizations are starting to balk at these costs.  There are two options for companies not willing to continue paying for support.   The first of course is to depend on your own staff for support.  This sounds much easier said than done however.  The other is to seek out third party support vendors who can support your products at a lower cost than the manufacturer.  This is an option that is starting to appeal to a number of customers.