A Beginner’s Guide to Third-Party Software Maintenance
May 26, 2023
5 min read
May 26, 2023
5 min read
In today’s business climate, forward-thinking organizations are constantly on the lookout for ways to slim down their budgets without sacrificing quality and innovation. Third-party software maintenance (TPSM) is one way to achieve that goal.
Generally, independent TPSM providers offer a lower-cost alternative to the escalating maintenance, support, and consulting service fees charged by megavendors such as IBM, SAP, Oracle, and Microsoft.
There is a growing need for third-party software maintenance providers. In fact, 79% of IT and procurement leaders use some form of third-party maintenance, according to the 2020 Forrester Opportunity Snapshot, and 80% would recommend it to their peers.
Exploring whether or not third-party software maintenance is right for your company usually starts by thinking about the potential cost savings, which can be up to 50%. Considering the amount an organization spends on software annually is second only to its people costs, that savings can definitely be substantial.
The 2022 Gartner® “Market Guide for Independent Third-Party Support for IBM, Microsoft, Oracle, and SAP Software,” cites five scenarios the organization believes will drive the continued growth of the TPSM market:
IBM drives many businesses across the globe. A move to third-party software maintenance will not diminish the strength of your IBM systems. On the contrary, it adds a more innovative, flexible, and pro-customer approach to support and maintenance that megavendors seldom offer.
Here are four areas to consider when examining whether third-party software maintenance will benefit your organization.
Most companies start out with third-party software maintenance providers by entrusting one or two OEM products and then gradually transferring their entire estate over. Testing the service this way clarifies the value TPSM can bring to an organization. It also offers some leveraging power to negotiate with the megavendor going forward.
Customers that replace IBM® Software Subscription and Support (S&S) with TPSM for all application stacks do not need to maintain an ongoing relationship with the OEM, but those who plan to run a mixed support environment can benefit from this negotiating power. Maintaining a positive relationship with the megavendor might also help get them onboard with your strategic vision.
Ending an S&S contract will have a minimal effect on other interactions with IBM. Contacts in business processing outsourcing, transformation, and analytics will have little or no knowledge of software support agreements, so most relationships will remain unaffected by the move to a TPSM.
Remember, the decision to move from IBM support to a third-party software maintenance provider is not irreversible. Ideally, a company should wait until the three-year cancellation period has passed, but it’s always an option to reinstate the OEM’s maintenance contract or repurchase the software again from scratch.
Third-party software maintenance is absolutely legal.
It is widely accepted that an independent third-party can legally provide software maintenance services.
However, any modifications of proprietary source code or use of restricted APIs is illegal. Customers of providers who use these practices run the risk of having their contracts immediately terminated.
In some cases, the company might even come under scrutiny for possible complicity in circumventing the vendor’s intellectual property, so it’s extremely important to work with a reputable TPSM provider. Gartner’s third-party support market guide is published each year and lists several companies whom they recommend, including steps for evaluating third-party support.
TPSM providers should never edit copyrighted OEM source code. There are other ways to remedy issues, including using programming languages or scripts deployed throughout the company’s solution ecosystem.
IBM software licenses are almost always perpetual, so customers can continue to use the applications regardless of whether they have an active support and maintenance agreement with the company. This is not the case for SaaS licensing models, however, so you need to perform a comprehensive software license audit before switching to TPSM. A reputable third-party support and maintenance provider will often assist you with this assessment.
Legacy products are the foundation for most businesses. While many might hum along without any need for support or intervention, when a serious issue arises, immediate access to skilled product experts is imperative.
TPSM providers must be carefully vetted. Their technicians should have many years of IBM product expertise. It’s a good idea to ask for evidence of the provider’s average response times and time-to-fix statistics. Some TPSM providers even invite potential customers to talk with existing customers, so they can get a feel for the quality of support and how the service works.
Ideally, a third-party software maintenance company will be staffed by technicians who are experts in the software products they support and are strategic thinkers who can help you make good decisions to help guide your IT roadmap.
Due diligence is a must. Companies looking to switch to third-party software maintenance often have a lot of questions about compliance and data protection.
The important thing to note is that TPSM providers must uphold the same adherence to global compliance and data protection laws as the megavendors. The United States Privacy Act, the Sarbanes Oxley Act, and the Payment Card Industry Data Security Standard all could have bearing on your operations and must be rigorously upheld.
A third-party software maintenance provider should be able to demonstrate it is not only aware of the company’s compliance responsibilities, but that it’s also capable of keeping sensitive company data protected. In turn, organizations need to ensure their TPSM partner understands the constraints under which they operate and can establish safeguards to prevent potential breaches.
Any independent provider should also have a broad understanding of compliance and data privacy issues as they are related to OEM products, including post-warranty software versions and legacy applications.
Many organizations are being held captive by the amount of their technical debt. The truth is that no company can accelerate digital transformation without recovering some of its software maintenance spend. There’s just no other way to do that math.
With skyrocketing megavendor support and maintenance costs, third-party software maintenance providers are a viable alternative that can deliver significant cost reduction. That budget savings can then be reinvested into creating a plan to expand your company’s digital agenda and take back control of your IT roadmap.
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