There are many benefits of third-party software support services, but how can you predict what will work best for you?
Using independent third-party software support can transform a company’s digital estate, resulting in an enhanced tech stack, reduced cybersecurity vulnerability, and overall improved performance.
The 2022 Gartner® Report, “Market Guide for Independent Third-Party Support for IBM, Microsoft, Oracle, and SAP Software,” found that third-party providers can also offer significant savings, some up to 50% in software maintenance fees.
“Independent third-party software support providers give organizations a lower-cost alternative to escalating maintenance, support, and consulting fees charged by companies like IBM, Oracle, Microsoft, and SAP,” the report states.
A ‘Quick Win’
The number of third-party software support deals rose 18 percentage points — from 27% to 45% — since the last Gartner Sourcing, Procurement, and Vendor Management Survey in 2021. This can be attributed to the financial disruption imposed by the impact of COVID-19, the Russian invasion of Ukraine, inflationary headwinds, and the threat of a looming recession.
When third-party support is a feasible alternative, Gartner labels significant software maintenance and support cost reduction opportunity a “quick win,” pointing out it can keep budgets flat by “eliminating ongoing annual maintenance and support increases when organizations are challenged to meet cost-saving goals and initiatives.”
But how do you know if third-party software support would be a good fit for your company?
Here are three steps Gartner recommends when assessing third-party software support offerings.
Step 1: Conduct a Feasibility Study
Are you migrating to the Cloud anytime soon?
What’s your ROI when comparing the value received to the annual cost paid for vendor maintenance and support?
Have you recently received an end-of-support notification that your older-version software will no longer be covered without a customized support agreement and for an additional fee?
In these scenarios and many others, Gartner recommends looking at third-party software support providers to weigh the pros and cons of their services.
Most companies offer a feasibility assessment, a free evaluation that compares the cost of staying with OEM support versus the price of third-party support. For example, price analysts can take a company’s IBM parts and quantities and estimate the potential cost savings if it switches to a third-party software support provider.
The feasibility assessment also features a list of all the product versions the company is entitled to, a case history evaluation, and a technical assessment that illustrates the value of switching. This is done completely free of charge. All company information is kept confidential.
Step 2: Conduct a Risk-Benefit Assessment With IT and Key Stakeholders
Assess whether third-party software support aligns with your long- and short-term strategy and evaluate the role the OEMs’ products play in your technology roadmap. Gartner suggests downloading the three- to five-year software plan and mapping out the upgrade path and needs for each product that is being considered for third-party software support. Then thoroughly review each maintenance and support policies to ensure all the special entitlements or use of tools that are contingent upon renewing annual maintenance are understood.
Next, engage your legal counsel to review governing agreement and transaction documents to understand the vendor maintenance cancellation terms and policies to avoid situations that would create noncompliance. For example, some companies have agreements that include an “all or none” subscription and support requirement, the report states, which could create noncompliance for a partial quantity cancellation of support.
Gartner also recommends asking the third-party software support provider to explain and document their policy in case an unexpected situation occurs that results in the need to return to the OEM and reinstate support. This should be negotiated and included as a term in your MSA with the third-party software support provider.
As with all contracts, request at least three references and ask them specific questions about their experience and satisfaction with the third-party software support provider.
Step 3: Arrange No-Charge Pilot Programs to Test Out Third-Party Software Support Capabilities
Some companies offer a case by case no-charge pilot program to evaluate third-party software support, particularly if there is strategic value. They test out technical support and capabilities across various products, measure response time and problem resolution rate, and demonstrate the potential provider’s ability to meet special support requirements for specific applications. These programs could be the final determining factor to ensure if third-party software support is right for you.
Go or No Go?
Ultimately, Gartner found companies can reduce cost and operational risk when they engage stakeholders for a third-party software support risk-benefit analysis and then arrange for a proof of concept for providers to share their service offerings and support capabilities. Many companies have found that using third-party software support providers can take the pressure off their IT teams and free up budget for investing in new technologies.
Find out if third-party software support is right for your business. Get started now.
Want to read the 2022 Gartner Report? Download the Market Guide.
Gartner, Market Guide for Independent Third-Party Support for IBM, Microsoft, Oracle, and SAP Software, Jo Ann Rosenberger, Michael Silver, Sept. 12, 2022.
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